Profitability analysis of listed manufacturing companies in Sri Lanka: An empirical investigation

Abstract

This paper is determine the profitability of 10 selected  listed manufacturing companies in Sri Lanka over the period of 2008 to 2012, and  the performance of thecompanies against four commonly used financial performance indicators: Gross profit (GR) ,Net profit (NP),Return onAssets (ROA) and Return on Equity (ROE). The results indicate that during this periodSri Lankan manufacturing companies were considerably more profitable in terms of GP and ROA but less profitable in terms of NP and ROE. A similar trend was observed when the profitability and equity ofcompanies were analyzed by industry. The results revealed that the profitability of manufacturing companies is less satisfactory. Based on the Gross Profit Ratio, Net Profit Ratio, Royal Ceramics Lanka Ltd is at first whereas ABANS Electrical Ltd is at first based on ROA andLanka Ceramic Ltd (CERA) is at first on ROE. Outcome of the study is beneficial to academicians, policy makers, practitioners and so on.

Keywords: Profitability, analysis, listed, manufacturing, companies, Sri, Lanka,