ABSTRACT
This study examines the relationship between the value relevance of corporate financial statements and share price valuation in Nigeria's banking sector. The objectives are to ascertain the impact of financial statement variables, including book value per share, earnings per share, returns on assets, and dividend per share, on share prices.
Using a cross-sectional design, data was collected from annual reports of thirteen deposit money banks listed on the Nigerian Exchange Group from 2017 to 2022. The methodology employed census sampling technique, with secondary data analyzed using the Modified Edwards Bell Ohlson (EBO) model and Ordinary Least Squares (OLS) estimator technique.
Findings reveal significant relationships between financial statement variables and share prices. Book value per share and earnings per share exhibit notable correlations with stock prices, indicating investor reliance on these metrics. Returns on assets also demonstrate a significant association with stock prices, reflecting investors' consideration of profitability. Additionally, dividend per share shows statistical significance, suggesting its impact on investors' perceptions of firm value.
Recommendations include encouraging financial statement analysis, enhancing production and sales capacities for increased revenue, and improving earnings and dividend policies to positively influence stock prices.
