Value Relevance of Accounting Information and Share Prices Movement of Quoted Consumer and Industrial Goods in Nigeria

Abstract

The study was conducted to comparatively review which accounting numbers have value relevance influence on share prices of consumer and industrial goods of quoted companies in the Nigerian stock exchange. This precede the notion that all accounting numbers are equally relevant in pushing and pulling share prices of companies which the researchers believe is flawed and thus required empirical analysis. Ex-post-facto research design was employed involving use of secondary data obtained from published annual reports of the Nigerian Stock Exchange (NSE) and selected consumer and industrial goods companies listed on the stock exchange. Data were analysed using descriptive and inferential statistical techniques. Econometric tests conducted included multicollinerity, unit root, Hausman and ordinary least squares (OLS) regression as well as Pearson correlation analysis. The variables of study were Stock prices, Book values per share (BVPS), Earnings Per Share (EPS) and Cash flow from operating activities (CFO). Results confirmed value relevance of accounting information in the two sectors studied, but show the CFO and EPS are more relevant in the Consumer goods Sector while EPS is more value relevant in the Industrial goods sector, in determining share
price movement in Nigeria. It was recommended that investors in the different Sectors should rely on the specific accounting information relevant to their decisions.