Accounting Information and Dividend Pay-Out in Nigerian Listed Oil and Gas Firms

Bernard Wilson,Heriot-Watt University, United Kingdom

doi:10.47191/jefms/v5-i1-22

Bernard Wilson, Heriot-Watt University, United Kingdom

Open Access

https://doi.org/10.47191/jefms/v5-i1-22

Copy DOI

Abstract

Dividend pay-out policy plays an important role in firm’s decision to determine the amount to be declared as dividend. The study aim to analyse the impact of accounting information on the dividend pay-out of listed oil and gas firms in the Nigerian Stock Exchange. The study employs the use of secondary data obtained from annual reports and accounts. The population of the study is ten oil and gas firms listed in the Nigeria Stock Exchange, the sample of the study ten oil and gas firms and the period covered by the study is from 2015-2019. The data is panel in nature and regression was used to analyse the data. The result shows profitability is having a positive and significant relationship on dividend pay-out of the listed oil and gas firm in Nigeria. Whereas, liquidity revealed a negative and insignificant relationship. On the other hand, firm size was found to be negative and significant influence on the listed oil and gas firms in Nigeria. Finally, a positive and insignificant relation was found respectively. This implies that individual investor who prefers high dividend should invest on profitable company, while management should announce the dividend after considering their profit. Also, Investors who are trying to predict future dividends will therefore need to get some relevance and useful information on the firm to invest in. Furthermore, Managers may also use the study when determining the dividend pay-out since they will be given relevance information for decision making.

Highlights

The two important characteristics of good accounting information are that the information is relevant and fairly presented in order to assist users in decision making
A positive and insignificant relation was found respectively. This implies that individual investor who prefers high dividend should invest on profitable company, while management should announce the dividend after considering their profit
Which implies that as liquidity is increasing by 1, dividend is pay-out is reducing by #0.2712 in the case of leverage and the dividend pay-out, the coefficient found is positive with coefficient value of (0.2553) and with p-value of (0.271) which is greater than 10%, it implies that a positive an insignificant relationship exists between liquidity and dividend pay-out of listed oil and gas firms in Nigeria

Summary

Introduction

The two important characteristics of good accounting information are that the information is relevant and fairly presented in order to assist users in decision making. Relevant and well-presented information enables users to make investment decisions by examining past and current financial statements in other countries to be able to predict future events through them (ICAN, 2014). The importance of accounting information can be judged by the ability of the financial information contained in the financial statements (Paul and Juliana, 2015). Reliable accounting information is a basic requirement for growth as investors require sufficient information about the nature of dividend for the company before making an investment decision (Oyerinde, 2006). It is important to note that financial statements will only be employed by the investor when valuing the shares of a company in the stock market only if they provide useful information for them.

Objectives

Methods

Findings

Conclusion