Performance Evaluation of Manufacturing Companies

Abstract

This study aimed to analyze the performance evaluation of manufacturing companies of Nepal. To achieve the specific objective of the study, descriptive and causal comparative research has been carried out. The study is conducted using panel data of three manufacturing companies of Nepal for the period 2012/13 to 2021/22. The dependent variable is profitability Return on Assets (ROA) and Earnings per Share (EPS) while the independent variables are total assets, total revenue, total cost and debt ratio. For the purpose of this study, the secondary data have been used. Regression analysis is used as a major tool of analysis. ROA is negatively impacted by total assets, total revenue and debt ratio, where total revenue and debt ratio is not significant even at 10% level of significance, but total assets which is negatively significant even at 5% level of significance. The value of R-square is 49.31%, the P-value of regression is 0.0036 which is statistically significant at 0.05 level of significance. So, there is linear relationship of ROA with total assets, total revenue, total cost and debt ratio. As per the result of earnings per share, the value of R2 of ROA and EPS is 49.31% and 74.86%, the P-value of regression is 0.0036 and 0.000 which is statistically significant at 1% and 5% level of significance. There is significant impact of total assets on Earning per share but insignificant impact of total revenue, total cost and debt ratio on earning per share of manufacturing companies. The results of the study could help companies and policymakers to take an effective action in order to improve performance and profit of manufacturing companies.