THE IMPACT OF CAPITAL ADEQUACY AND OPERATING EFFICIENCY ON PERFORMANCE OF NEPALESE MANUFACTURING COMPANIES

Abstract

The objectives of the study are to explore current Situation of capital adequacy, total turnover ratio, total debt to total assets ratio and operating expenses to sales revenue ratio and profitability of the manufacturing company of Nepal, to analyze the relationship of capital adequacy, total turnover ratio, total debt to total assets ratio and operating expenses to sales revenue ratio with profitability of the manufacturing company, to examine the impact of capital adequacy, total turnover ratio, total debt to total assets ratio and operating expenses to sales revenue ratio with profitability of the manufacturing company. The research use descriptive and casual comparative research design. The descriptive research design used for objectives one and casual comparative research design for objective two and three. The secondary data with three sample of the manufacturing out of eighteen are selected as an availability of data for ten years judgmental sampling. The descriptive statistics, correlation and regression analysis is conducted for the research. The SPSS and excel are the tools for analysis of the data. The finding of the research are the manufacturing industries of Nepal are seem, the Return on Equity, Return on Assets, Capital Adequacy, Assets Turnover, Total Debt to Total Assets and Operating expenses to Revenue related variables are very much fluctuating, very high to less in the year to year or they are not in consistence. The relationship between assets turnover and return on equity, operating expenses to revenue to return on equity, capital adequacy to return on assets, total debt to total assets to return on assets, operating expenses to return on assets are significant. The capital adequacy to the return on equity, total debt to total assets to return on equity and assets turnover and return on assets is significant relationship. The impact of assets turnover to the return on equity and operating expenses to revenue to the return on equity is significant. The capital adequacy to return on equity and total debt to total assets to the return on equity is insignificant impact. The capital adequacy to the return on assets and operating expenses to revenue to the return on assets is significant impact. The asset turnover to the return on assets and total debt to total assets to the return on assets is not significant impact. Keywords: Capital Adequacy, Asset Turnover, Operating Expenses, Debt to Total Assets and Profitability