EFFECTS OF ACCOUNTING INFORMATION ON STOCK RETURNS OF QUOTED NON-FINANCIAL FIRMS IN NIGERIA

Abstract

The stock market has functionally remained a key player in the Nigerian capital market, especially by providing access for investors in equity. As a trust based market, the sustenance of investors’ confidence via client’s accountability is a primary responsibility of both operators and regulators. The study examined the effects of financial accounting information on stock returns of quoted non-financial firms in Nigerian. Specifically, the study ascertained the effect of dividend per share (DPS); operational cash flow (OCF) and invested capital (INC) on the stock returns of quoted non-financial firms in Nigeria. The study adopted ex-post facto design which allowed the use of secondary data. The panel data were collected from financial reports of seventy-five (75) sampled non-financial firms quoted on the Nigerian Exchange group (NGX) between 2012 and 2021, out of one hundred and twelve (112), using purposive sampling technique. The hypotheses formulated were tested with panel quantile regression at 5% level of significance. The result of the analyses indicates that Dividend per share has negative and significant effect on stock returns; Operational cash flow has positive but no significant effect on stock returns; and invested capital has negative and no significant effect on stock returns of quoted non-financial firms in Nigeria. The policy implication of the findings of the study is that Dividend per share is a veritable tools in predicting accounting information value relevance among the quoted non-financial firms in Nigeria. Thus, the study concludes that DPS is the accounting information that significantly influences investor’s decision in non-financial firms in Nigeria. The study recommends among others that non-financial quoted firms in Nigeria should restore the investors’ confidence in the financial statements, ensuring that at all time that their share price will be a reflection of their performance.