DETERMINANTS OF PROFITABILITY IN MANUFACTURING COMPANIES IN NEPAL

Abstract

The objectives of research are; to assess the factors affecting profitability of Nepalese manufacturing companies. to analyze the relationship between liquidity (L), leverage (LEV), managerial efficiency (ME), capital intensity (CI), annual inflation (AI) and GDP growth (GDPG) to the return on Equity(ROE) and return on assets of the manufacturing companies in Nepal and to examine the impact of Liquidity (L), leverage (LEV), managerial efficiency (ME), capital intensity (CI), annual inflation (AI) and GDP growth (GDPG) to the return on equity(ROE) and return on assets of the manufacturing companies in Nepal. The researcher done literature review of the research is mainly based on articles and thesis of previous scholars. The descriptive and casual relation research design is used. The population is all the manufacturing companies of Nepal and three four sample manufacturing are taken for research randomly. Each companies has a 10 observation and in total 40 observations and secondary data SPSS and Excel are the tools of data analysis. The finding is that through descriptive statistics and empirical review is the factors affecting profitability are liquidity, leverage, management efficiency, capital intensity, annual inflation in Nepal and gross domestic product. The liquidity, leverage and capital intensity relationship to the return on equity is significant. The managerial efficiency, annual inflation rate and gross domestic product have not significant relationship with return on equity. The liquidity, leverage and capital intensity have significant relationship to the return on assets. The managerial efficiency, annual inflation rate and gross domestic product have not significant relationship with return on assets. The impact of Liquidity, Leverage, Management Efficiency, Capital Intensity and Annual Inflation have significant impact to the return on equity and gross domestic product has not significant impact to the return on equity. The impact of Liquidity, Leverage, Management Efficiency, Capital Intensity and Annual Inflation have significant impact to the return on assets and gross domestic product has not significant impact to the return on assets