Forecasts in Prospectuses and Actual Performances of Some Selected Nigerian Companies
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Date
2005
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Publisher
International Journal of Accounting
Abstract
To what extent can one rely on forecasts in prospectuses issued by Nigerian companies? What legal remedies are available to investors/shareholders when directors fail to achieve ich forecasts? In answering these and other similar questions, the paper compared forecasts in the prospectuses of selected Nigerian companies with actual results. The selected companies cover almost all spheres of the Nigerian economy bunking manufacturing, the conglomerates and oil and gas sectors-for different periods. Using paired sample t-tests on key variables like turnover, earning per share and dividend per hart, it was discovered that a greater percentage of the sampled companies failed to meet their forecasts. Since not all long-term strategies are profitable in the short-run potential estors and existing shareholders should not base their investment decisions on profit forecasts alone but should consider other socio-economic and political factors