INFORMATION AND SHARE PRICES OF CONSUMER GOODS COMPANIES IN NIGERIA

Abstract

Financial markets rely on accurate and relevant accounting information to guide investment decisions. However, concerns persist regarding the extent to which financial statements influence share prices, particularly in Nigeria's consumer goods sector. Hence, this study investigated the effect of the value relevance of accounting information on share prices in the Nigerian consumer goods industry from 2012 to 2022. A total of 13 industries were selected using purposive sampling. The study employed panel multiple regression with a fixed-effects model alongside the Dumitrescu and Hurlin panel causality test to analyze the data. The findings revealed that earnings per share, book value of equity, and cash flow from operations have a significant and positive impact on share prices. Additionally, the causality test established a unidirectional causality running from these accounting measures to share prices, confirming that financial information drives stock performance rather than the reverse. Based on these findings, the study recommends that investors, regulators, and policymakers prioritize accurate, transparent, and timely financial reporting to enhance market efficiency and investor confidence. Strengthening financial disclosure standards and corporate governance practices will further ensure the reliability of accounting information in influencing share price movements.