Business, Management and Accounting
3 years ago

Stock prices influenced by cashflow, not earnings, for Nigerian firms

International Journal of Progressive Sciences and Technologies
Accounting Information and Stock Price: Empirical Evidence from Quoted Manufacturing Firms in Nigeria
Anachedo Chima Kenneth, Chinedu Francis Egbunike, Nnojie Izuchukwu Andrew, Jeff-Anyeneh Elechi Sarah

Paper Summary

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The article examines how accounting information affects stock prices of consumer goods manufacturing firms in Nigeria. Data from 2011 to 2019 was analyzed, showing that earnings per share and sales growth ratio do not significantly impact stock prices, while operating cashflow ratio has a positive effect. Return on assets has a non-significant positive effect on stock prices. The study suggests that investors should focus on cashflow statements for accurate company information and not rely solely on profitability indicators when making investment decisions.