The Accounting ratios and share price of quoted consumer goods firms in Nigeria

Abstract

Purpose: This study examines the impact of accounting ratios on the stock prices of quoted consumer goods firms in Nigeria, providing insights for investors and stakeholders. The research uses financial reports of quoted consumer goods firms in Nigeria from 2013 to 2022, focusing on Dividend Per Share, Earnings Per Share, Returns on Assets, and Current Ratio.

Methodology: An ex-post-facto design was adopted, utilizing secondary data obtained from 15 out of 21 quoted consumer goods firms from NGX over ten years (2013-2022), being a purposeful sampling technique representing 71.43% of the population. Balanced panel data regression analysis and descriptive statistics were employed.

Results and conclusion: The findings show an R-squared value of 0.36, indicating that inflation, interest rates, earnings per share, current ratio, and return on assets account for approximately 36% of the variations in stock prices, while variables outside the model account for 64%.

Implication of findings: The study highlights the importance of considering both internal and external factors when making investment decisions and suggests that investors should look beyond accounting ratios to understand stock price movements.