This study examined the issue of “Effect of Annual Financial Report on Stock Market Prices”. To
achieve this purpose, the study was intended to stress the following: The reliability of the information
contained in annual financial report, Identify ways of improving the potentials of the stock market and
effectiveness of investors’ participation and the relationship between annual Financial Report and Stock
Prices. The method used in obtaining data was secondary data four (4) listed firms in the Nigeria stock
market.
This research work employed simple regression and student’s t- test as a method of analysis and E-views econometric software package 3.1 was used to run the analysis. The result of the findings shows
that it is only 73% of change in stock market prices is as a result of change in profit after tax, earning
per share and dividend payout and that Nigerian’s when investing in the stock market look at profit after
tax and dividend payout without looking at earnings per share which shows the real value of the
investment. The study recommended that there is need to resort to the company’s financial report when
investing in the company and that earning per share should be an important factor to look for when
investing, because it shows the real value of the investment.
