VALUE RELEVANCE OF ACCOUNTING INFORMATION IN NIGERIAN CAPITAL MARKET

Abstract

The value relevance of accounting information (sales growth and profits) on the stock price of pharmaceutical enterprises listed on the Nigerian Capital Market was explored in this article. The study used an ex-post facto research approach, which permits data from the company's records to be retrieved. It employed a judgmental sample of three publicly traded Nigerian pharmaceutical businesses over ten years (2010–2020), and the data was analyzed using ordinary least squares (OLS) regression. The data study revealed that profits per share associated favorably, whereas sales growth ratio correlated adversely with the stock price of publicly traded pharmaceutical corporations. Furthermore, the profits per share and sales growth rate of pharmaceutical companies have no meaningful association with stock prices (SP). Profitability should not be considered as the only criterion in stock purchase decisions, according to some experts. This is because certain executives may participate in earnings manipulation in order to seem profitable to the market while suffering from a deeper internal crisis.