Impact of Cost Control in Nepalese Listed Manufacturing Companies Profitability

Abstract

This study examines the impact of cost control on Nepalese listed manufacturing companies profitability with a survey study of five listed manufacturing companies in Nepal with the purpose of providing critical evaluation of the need and significance of cost control. This study used primary data taken from five companies which remain in the industry more than ten years among eighteen manufacturing companies listed in Nepal Stock Exchange which are operating at the time as manufacturing firms. Descriptive and analytical research design ware employed to examine the impact of some major variable such as Budgeting, Standard Costing, Internal and external costing, Responsibility Accounting, Marginal costing and Value analysis on profitability. The surveyed data of five manufacturing companies have been analyzed using different statistical tools. Data were collected by distributing structured questionnaire to respective company’s management and employees. Finding of the research shows that cost control tools have negative relationship with profitability. Moreover, insufficient resources have created more challenged for application of cost control tools in Nepalese manufacturing companies. It is therefore recommended to use value analysis for cost control and increase profitability of the organizations. As a result, firms will be able to maximize the value and control cost in days to come.