Original Research Article | OPEN ACCESS
Return on Assets and Market Stock Prices of Quoted Deposit Money Banks in Nigeria

E. O. Oladutire W. H. Agbaje

For correspondence:-  E. Oladutire   Email: eoladutire@gmail.com

Received: June 8, 2019        Accepted: September 21, 2019        Published: September 30, 2019

Citation: Oladutire EO.Agbaje WH. Return on Assets and Market Stock Prices of Quoted Deposit Money Banks in Nigeria. Account Tax Rev 2019; 3(3):78-90 doi:

© 2019 The authors.
This is an Open Access article that uses a funding model which does not charge readers or their institutions for access and distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0) and the Budapest Open Access Initiative (http://www.budapestopenaccessinitiative.org/read), which permit unrestricted use, distribution, and reproduction in any medium, provided the original work is properly credited..

Abstract

The study examined the impact of return on assets on market stock prices of quoted deposit money banks in Nigerian. This study adopted ex-post facto research design to assess the relationship between return on assets and stock prices of deposit money banks in Nigeria. A sample of 10 deposit banks quoted on the NSE was selected between the year 2009 to 2017.Preliminary analysis such as descriptive analysis was first conducted and this was followed by panel data regression. The results obtained disclose that the market prices of commercial banks’ stock and net asset per share ratio are related in the long run. Additional Granger Causality Test indicated that unidirectional causality found the existence between stock prices and returns on assets. The study concluded that returns on assets do not significantly associate with stock prices of money deposit banks in Nigeria. The study suggested that further research could address other financial ratios and even for a longer period of time. A study on the combine effects of these ratios, as against the effects of individual ratios, is also recommended.

Keywords: Return on Assets, Market stock price, Efficiency, Ratio, Quoted Banks.


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