The potency and value significance of earnings persistence and its effect on business performance, as well as the consequences of analysts' correct forecasting abilities from Nigeria's rising market, were investigated in this article. The study used an ex-post facto research approach and used stratified random selection to examine 51 companies listed on the Nigerian Stock Exchange across an 11-year period, from 2009 to 2019. The influence of earnings persistence on company performance was studied using descriptive statistics and panel data regression analysis. The following diagnostic tests were performed: There was no evidence of multi-collinearity among the variables when using the Variance Inflation Factor. The Correlation Matrix test indicated no issues with multicollinearity, and the normality test utilising the Jarque-Bera test of normalcy revealed no issues with the study. The findings of the Breusch–Pagan/Cook–Wesberg test to analyse the variation in the error terms (residuals) of the models showed that none of the models were heteroscedastic. EPERS had a negative and non-significant effect on company performance (Tobin's Q), according to the study. Tobin's Q has a positive association with leverage, but a negative relationship with business size (TQ). EPERS and Tobin's Q both have a modest growth trend, according to the data. The persistence of earnings as a result of discretionary and opportunistic earnings could lead to erroneous predictions. As a result, the study recommended that analysts keep an eye on earnings stability while reviewing reported financial statements, because otherwise, projections based on them could be negative and deceptive.
Author (S) Details
Theophilus Anaekenwa Aguguom
Accounting and Finance Department, Augustine University, Ilara-Epe, Lagos State, Nigeria.
Samuel, O. Dada
Accounting Department, Babcock University, Ilishan Remo, Ogun State, Nigeria.
Appolos, N. Nwaobia
Accounting Department, Babcock University, Ilishan Remo, Ogun State, Nigeria.
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