Equity Valuation and Financial Reporting in the Manufacturing Sector ln Nigeria

Abstract

This study examined the impact of equity valuation metrics — Price-to-Book ratio, Price-to Earnings ratio, and Dividend Yield — on financial reporting comparability and transparency among listed manufacturing firms in Nigeria. Using a quantitative ex-post facto design, the study analysed panel data from 15 NGX-listed manufacturing companies from 2016–2025. Comparability was measured using the Barth et al. (2012) accounting system comparability score, while transparency was proxied by the FRC Nigeria disclosure index. OLS and fixed-effects regression results indicated that P/B ratio and Dividend Yield had a statistically significant positive relationship with both comparability and transparency, whereas P/E ratio showed a weaker, context-dependent association. The findings suggested that firms with higher market based valuations were incentivized to provide higher quality disclosures to sustain investor confidence in Nigeria’s volatile macroeconomic environment. The study recommended that the Financial Reporting Council mandate standardized valuation-related disclosures to reduce information asymmetry.