EARNINGS, SALES GROWTH AND SHAREHOLDERS VALUE OF LISTED INDUSTRIAL GOODS FIRMS IN NIGERIA

Abstract

Shareholders’ expectation is to get a commensurate return on their investment after providing funds for businesses but often times, the returns they get does not measure up to what they have invested. One of the reasons for this is that managers of businesses employ various business strategies to create value for the owners of these businesses and are often faced with the selecting the best way of creating values. This study examined the effect of earnings per share and sales growth on shareholders’ value of listed industrial goods firms in Nigeria for a period of ten years (2014–2023) using secondary data obtained from the annual audited reports of the sample firms. The population of the study consists of the thirteen listed industrial goods firms on Nigerian Exchange Group as at December 31, 2023 but 8 firms were evaluated due to availability of data. The data collected was analysed using panel data regression analysis. The result (coefficient -0.000463 and P-value 0.9888253) shows that earning per share does not significantly affect shareholders’ value of Nigerian listed industrial goods firms while sales growth (coefficient -0.141912 and P-value 0.000890) has a significant effect on shareholders’ value. The study concluded that sales growth has influence on shareholders’ value of listed industrial goods firms in Nigeria. Hence, the study recommends that managers of listed industrial goods firms in Nigeria should maintain optimal sales growth in order to create values for their shareholders.