Empirical evaluation of value relevance of accounting information on share prices of listed service companies in Nigeria

Abstract

The study was conducted to evaluate the connection between value relevance of accounting information proxied by EPS, BVPS, and CFO, and stock prices of quoted service companies in the Nigeria. This was presupposed on the mixed results regarding which accounting variables affect share prices mostly in various stock exchanges and economies from prior studies. Ex–post facto research design was applied using published reports of the select firms and Nigerian stock Exchange for various years. Twenty (20) service companies were selected purposively out of twenty-five (25), which was the population. Data were analyzed using Beta coefficient, t– values, P-values, r2 and F–ratio. The result revealed that EPS was significant and positive, while BVPS and CFO were positive but not statistically meaningful in determining share price movements of service companies in Nigeria. It is concluded that accounting numbers are germane in explaining share price movement and recommended that investors should make use of information from the income statement in their investment decisions.