Accounting Information and Stock Price: Empirical Evidence from Quoted Manufacturing Firms in Nigeria (original) (raw)
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Asian Finance & Banking Review, 2020
This study the relationship between accounting information and the stock prices of quoted firms in Nigeria. The general objective was to examine if accounting information have any effect on market value of quoted firms. Cross sectional data was sourced from financial statement of 23 manufacturing firm from 2008-2017. Stock price of the firms was modeled as a function of assets turnover rate, book value per share and debt equity ratio. Ordinary least square method of cointgration, unit root and granger causality test was used to determine the extent to which human resource cost affect quality of financial report. After cross examination of the validity of the pooled effect, fixed effect and the random effect, the study accepts the fixed effect model. The study found that the independent variables explained 78 percent variation on the market value of the quoted firms. The beta coefficient of the variables indicates debt equity ratio and assets turnover rate have positive effect on ...
This paper has investigated the relationship between earnings and changes in earnings to stock returns in the Nigerian stock market from 2007 to 2011. An ex-post facto research design was adopted, and the population of the study was made up of all the 198 companies listed on the Nigerian Stock Exchange as at 2011, using Purposive sampling 40 companies were selected. The data was collected from financial statements of the companies and from the NSE. Regression analysis was used as a tool of analysis, while other tests namely Correlation Analysis, Durbin-Watson Statistics (DW) and Variance Inflationary Factor (VIF) were conducted to validate the result of the study. The results indicated that there is a significant relationship between accounting information and stock prices in the NSE. The conclusion drawn is that there is a significant relationship between earnings and stock returns in the Nigerian stock market, hence earnings are related to both price and return in the Nigerian stock market, while change in earnings is not significantly related to stock return. It is recommended that since stock returns are related to earnings, companies listed on the Nigerian stock market should work towards increasing their earnings at the end of every financial year and current and potential investors should critically examine the earnings figure of companies while making investment decisions in Nigeria. Keywords: Accounting information, Stock returns, Stock Prices, Earnings, Bookvalues, Nigerian Stock market
Journal of Accounting and Financial Management
Accounting fundamentals has been described as one of the key factors considered by investors when taking investment decisions. Previous studies focused on the role of accounting information on share price and completely underestimated the influencing role of real Gross Domestic Product (RGDP) on the relationship. Scholars have suggested that RGDP is important in understanding and explaining the change in share prices. Therefore, this study extended on the Ohlson model to incorporate RGDP so as to examine the moderating role of RGDP on the relationship accounting fundamentals and share price of listed manufacturing firms in Nigeria Exchange Group. The study covers 65 firms listed on the NGX for the period 2012 to 2021. The data for the study was sourced from NGX fact book and the Central bank Bulletin. The methods used for testing the information content of various accounting information were Ordinary Least Squared (OLS), Random Effects Model (REM), Fixed Effects Model (FEM). The fin...
Accounting Numbers and Stock Prices in the Nigerian Stock Market
Journal of Accounting and Auditing: Research & Practice, 2016
This research is motivated to study the extent to which accounting information summarizes stock prices in Nigerian stock market as an indicator of value relevance. Piece of accounting data is termed value relevant if it is significantly related to the dependent variable, which may be expressed by the stock price. The methods used for gauging information contents of various accounting numbers were Ordinary Least Squared (OLS), Random Effects Model (REM), and Fixed Effects Model (FEM). The findings show that there is a significant relationship between accounting information and share prices of companies listed on the Nigerian Stock Exchange. Dividends are the most widely used accounting information for investment decisions in Nigeria, followed by earnings and net book value. The study therefore recommends that the firms should improve the quality of earnings as manipulated earnings (of which dividends are subsets) have large effects on share prices. The paper also recommends that all companies listed on the Nigerian Stock Exchange should prepare Simplified Investor's Summary Accounts (SISA) with emphasis on the most widely used accounting information along the required mandatory detailed financial statements to suit Nigerian peculiarities. The study's findings and recommendations may be of use to National Standard Setters, preparers of accounting information, Nigerian Stock Exchange Regulators, investors and other emerging stock market.
ACCOUNTING INFORMATION AND EQUITIES PERFORMANCE IN NIGERIAN FINANCIAL FIRMS
This study assesses the relationship between accounting information and equities performance of quoted financial firms in Nigeria. Ex-post facto research design was adopted with fifty-one (51) quoted financial firms as the population and the sampled size of the study was forty-four (44) using Krejcie and Morgan 1970 table with aid of Judgmental sampling technique. The study period spanned from 2012 to 2020 while a random effect regression test was used to test the hypotheses formulated with the aid of STATA 13.0 software. The study results reveals among others that, debt to equity has a positive and statistically significant relationship with the market share price of quoted financial firms and asset base has a positive and statistically significant relationship with market share price of Nigeria quoted financial firms. The study recommended among others that firms should try to finance their investment activities with debt-equity and consider either debt or equity as a last option. This implies that the study strongly recommended that corporate firms in Nigeria should use more debt-equity capital than either debt or equity capital in financing their business activities to enhance equities performance and improve Nigeria's Economy.
Impact of Accounting Information on Market Value of Equity in Nigeria
Ambrose Alli University (AAU) Journal of Management Sciences, 2016
This paper examines the impacts of accounting information on the market value of shares in Nigeria. The study relied on pooled panel data extracted from Nigeria Stock Exchange and annual report and account of 59 listed companies in the Nigeria Stock Exchange over the period 2008-2014. The study found that; fixed-effect model is more appropriate over random-effect model in Hausman's test for appropriate model, Pesaran test of cross sectional dependence show no serial correlation in the residual across entities. Assets' tangibility, EPS, P/E ratio and firm size were positive and statistically significant to explain market value of equity. The study recommends large tangible assets for attracting investors while management should maintain activities that will lead to higher earnings and at the same time result to growth of the firm.
American Finance & Banking Review, 2020
This study the relationship between accounting information and the market value of quoted firms in Nigeria. The general objective was to examine if accounting information have any effect on market value of quoted firms. Cross sectional data was sourced from financial statement of 23 manufacturing firm from 2008-2017. Market value of the firms was modeled as a function of earnings per share, return on equity and dividend per share. Ordinary least square method of cointgration, unit root and granger causality test was used to determine the extent to which human resource cost affect quality of financial report. After cross examination of the validity of the pooled effect, fixed effect and the random effect, the study accepts the fixed effect model. The study found that the independent variables explained 79 percent variation on the market value of the quoted firms. The beta coefficient of the variables indicates return on equity; earnings per share, dividend per share have positive e...
The Impact of the New Accounting Reporting Among Listed Firms in Nigerian Stock Market
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Impact of Accounting Information on Share Price: Empirical Evidence from Pakistan Stock Exchange
International Finance and Banking, 2016
Purpose—The purpose of this paper is to examine the relationship between accounting information and share price. In order to achieve this, a model that includes specific accounting ratios (earning per share, book value per share, capital employed per share and operating cash flow per share) and shares a price is developed. Design/methodology/approach—The data were collected from the companies listed in KSE-30 index. The time frame spans from 2006 to 2013 and OLS regression models were used to examine the relationshipsFindings—The resulting evidence suggest that accounting information parameters have significant influence on share price and they have joint explanatory power in determining stock prices. This research finds the consistent results with pervious empirical researches.Originality/value—The present study adds to the existing literature by examining the impact of accounting information on share prices within the context of an emerging capital market such as Pakistan Stock Ex...
Annals of Spiru Haret University. Economic Series
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