Translation Methods and Reporting Profits of Listed Pharmaceutical Companies in Nigeria

The study focuses on the significance of pharmaceutical companies listed on the stock exchange, highlighting their obligation to maintain strict financial reporting standards for stakeholders' benefit. It emphasizes the critical role of reported profits as a key indicator of a company's operational efficiency, profitability, and value creation potential. Consequently, the research aims to investigate the influence of translation methods employed by Nigerian-listed pharmaceutical firms on their reported profits. The study utilized an ex post facto research design and gathered data from the annual reports and financial statements of seven pharmaceutical companies listed on the Nigerian Exchange Group (NGX). Census sampling was employed due to the small population size, enabling the examination of the entire population as the sample size. Data were collected over an eleven-year period from 2012 to 2022, and both descriptive and inferential statistics were used for data analysis. The analysis of the results revealed a significant adverse effect of translation methods on the reported profit (specifically, earnings per share) of these companies. This finding indicates that the translation methods employed had a detrimental influence on the reported profit or earnings per share of the pharmaceutical companies. In conclusion, the study reveals that translation methods play a critical role in shaping the reported profits of listed pharmaceutical companies in Nigeria. Pharmaceutical companies should meticulously evaluate and select translation methods that minimize the negative impact on reported profits. Keywords: Translation methods, Reported profit, Current exchange rate, Temporal exchange rate, Pharmaceutical companies. DOI : 10.7176/RJFA/15-8-01 Publication date : September 30th 2024