ACCOUNTING INFORMATION AND STOCK PRICE FLUCTUATIONS AMONG LISTED SERVICE FIRMS IN NIGERIA
Keywords:
Accounting Information, Average share price, Earnings per share, Operating cash flow, Return on Assets, Stock Price fluctuationsAbstract
This study was set to investigate the effect of accounting information on stock price fluctuations of listed service firms in Nigeria. The specific objectives of the study were; to examine the influence of Return on Assets(ROA), Operating cash flow(OCF), Earnings per share (EPS), on their stock prices measured by Average share price (ASP). The study adopted the ex post facto research design and the population comprised of twenty-two listed service firms in Nigeria. A sample size of seventeen firms were purposively selected from the service sector of the Nigerian Exchange Group (NGX), from 2010-2022. The data were obtained from annual reports of the firms included in the sample. The data were analyzed using descriptive tools, correlational and regression analyses. The pooled ordinary least square regression technique was used in testing the hypotheses of the study. The results showed that: return on assets (ROA) has negative statistically significant effect on Market Share Price (MSP) of service firms listed on the Nigeria Exchange Group (p-value = 0.007); Operating Cash flow (OCF) has no significant effect on Market Share Price (MSP) of service firms in Nigeria (p-value = 0.131); while Earnings per share (EPS) has positive significant effect on Market Share Price (MSP) of service firms listed in Nigeria (p-value = 0.000). In conclusion, investors in Nigerian service sector may focus more on earnings and growth prospects rather than current cash flow when valuing stocks. The study recommends that Investors should not rely solely on ROA in their decisions. They should consider a broader range of metrics, including EPS and potentially industry-specific measures, when evaluating service companies. Also, the Financial Reporting Council of Nigeria should create and update accounting standards to better reflect the valuation of service firms in Nigeria, and implement measures to enhance transparency and investor access to cash flow information..
Downloads
Published
Issue
Section
License
Copyright (c) 2024 Journal of Global Accounting
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Articles submitted to JOGA should not have been published or are currently under review by another Journal. Kindly see the guide for the preparation of the manuscript for details. Successful submission of articles by author(s) for publication clearly implies that the work is not an infringement of any existing copyright warranty as JOGA reserves the right to be indemnified by the author(s) where any breach of such warranty is proven. For ease of dissemination and to ensure proper policing of use, papers and contributions become the legal copyright of JOGA once published unless otherwise agreed.
Permission clearance should be obtained by the author(s) where applicable for the use of any content of interest not originally created by them. This must be done before the submission of the article to JOGA. Failure to do so may lead to a lengthy delay in publication, as JOGA is unable to publish any article which has permissions pending. Thus, the rights JOGA requires are:
- Non-exclusive right to reproduce the material in the article or book chapters.
- Print and electronic rights.
- To use the material for the life of the work (for instance, there should be no time restrictions on the re-use of material).
Where tables, figures or excerpts of more than 250 words are reproduced from another source, it is expected that:
- Author(s) should obtain the necessary written permission in advance from any third-party owner of the copyright for the use in print and electronic formats of any of their text, illustrations, graphics, or other material in their manuscript. Permission must also be cleared for any minor adaptations of any work not originally created by the author(s). The author (s) should not assume that any content freely available on the web is free to use.
- Where the author adapts a significant number of any material, the author(s) must inform the copyright holder of the original work.
- Author obtains any proof of consent statements
- The author must acknowledge figure(s) and content adopted or adapted in work utilizing source(s) and further capture them in the list of references.
