Financial Statement Analysis and Stock Valuation: An Empirical Evidence on the Volatility of Deposit Money Banks Listed on Nigerian Stock Market

Author : Adeyemi Akeem Adekunle, Ogunmuyiwa Michael Segun, Bakare Taophic Olarewaju, Akindele Jamiu Adeniyi, Ibikunle Jide, Ahmed Abubakar Zik-Rullahi

Abstract : This study examine the connection between financial statement analysis and stock valuation of deposit money banks (DMBs) listed on the Nigerian Exchange Group market volatility. The study adopted a dynamic panel structure of stock price over the period 2020 2024 and employed the two-step system Generalized Method of Moments (GMM) estimator, the result indicates a mixed outcome across the explanatory variables. Earnings per share (EPS) exhibits a positive but statistically insignificant effect on stock price (coefficient = 0.0003562, p-value = 0.209), suggesting that EPS does not significantly drive stock valuation within the sampled banks. Also, return on investment (ROI) displays a negative and slightly insignificant relationship at the 5% level (coefficient = −0.1560306, p-value = 0.056), while it achieves statistical significance at 10% level, demonstrating limited explanatory power in forecasting stock price movements. Firm size, however, shows a statistically significant negative effect on stock price (coefficient = −0.0965265, p-value = 0.002), inferring that rises in bank size are linked with declines in stock price, probably due to inefficiencies or market sensitivities of big organisations. The conclusion infer that firm-specific financial indicators may not be the main factors of stock price volatility in Nigerian DMBs, with external macroeconomic and market-specific factors possibly playing a further overriding role. The study recommends greater financial disclosure quality and greater investor reliance on inclusive market indicators outside traditional accounting metrics for informed investment decisions

Keywords : Earnings per Share, Financial Statement Analysis, Stock Market Volatility, Stock Valuation

Conference Name : International Conference on Financial Statement Analysis and Valuation (ICFSAV-26)

Conference Place : Virtual, Dallas, USA

Conference Date : 6th Jun 2026