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Nimalathasan Balasundaram
University of Jaffna
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Merit Research Journal of Art, Social Science and Humanities Vol. 1(1) pp. 001-006, May, 2013
Available online http://www.meritresearchjournals.org/assh/index.htm
Copyright 2013 Merit Research Journals
The main objective of the study is to determine the profitability of listed manufacturing companies in Sri
Lanka. In order to meet the objectives of the study, data were collected from secondary sources mainly
from financial report of the selected companies, which were published by Colombo stock exchange in
Sri Lanka. The results revealed that the profitability of manufacturing companies is less satisfactory. On
the basis of result and analysis, selected manufacturing companies has different ranking based on each
profitability indicators such as Gross Profit Ratio (GPR), Operating Profit Ratio (OPR), Net Profit Ratio
(NPR), Return on Investment (ROI), and Return on Capital Employed (ROCE). Based on the Gross Profit
Ratio, Operating Profit Ratio, Net Profit Ratio, ROYAL CHERAMIC PLC is at first whereas CHEVRON
LUBRICANTS PLC is at first based on ROI, ROCE. Outcome of the study is beneficial to academicians,
policy makers, practitioners and so on.
Keywords: Determination, Profitability, Manufacturing Companies.
INTRODUCTION
Profit is the primary objective of a business
(Nimalathasan, 2009). In point of view of the heavy
investment which is necessary for the success of most
enterprises. Profit in the accounting sense tends to
become a long term objective which measures not only
the success of the product, but also of the development
of the market for it. It is determined by matching revenue
against cost associated with it. Only those costs are
placed against revenue, which have contribution in the
generation of such revenue. An enterprise should earn
profits to survive and grow over a long period of time. It
provides evidence concerning the earnings potential of
a company and how effectively a firm is being managed.
If the enterprise fails to make profit. Capital invested is
Literature review
Objectives
2006
11.33
21.08
25.48
25.13
12.13
8.99
26.47
20.31
25.47
40.25
2007
9.74
21.4
23.94
26.72
7.95
9.72
23.87
23.69
24.56
40.06
2008
11.31
23.18
26.89
17.36
9.14
8.34
23.89
16.46
23.01
42.37
2009
11.83
25.3
26.15
14.64
7.93
9.17
35.62
16.56
23.17
43.92
2010
13.78
24.01
30.00
15.8
16.06
10.05
32.15
20.93
24.33
47.59
TOTAL
57.99
114.97
132.46
99.65
53.21
46.27
142.00
97.95
120.54
214.19
AVG
11.60
22.99
26.49
19.93
10.64
9.254
28.40
19.59
24.11
42.84
SD
1.45
1.77
2.24
5.58
3.48
0.66
5.26
3.09
1.02
3.10
2006
2007
2008
2009
2010
TOTAL
AVG
SD
ABANS
Acme
4.34
11.85
4.84
12.55
5.16
10.67
4.67
15.12
8.44
0.89
27.45
51.08
5.49
10.22
1.68
5.46
Central Industrial
9.76
9.85
10.03
9.63
12.99
52.26
10.45
1.43
ACL Cable
19.34
20.21
10.73
6.05
6.44
62.77
12.55
6.86
ACL Plastic
11.68
6.63
9.23
7.72
15.67
50.93
10.19
3.61
Lanka Aluminium
4.34
5.57
4.65
4.48
4.53
23.57
4.71
0.49
Chevron Lubricants
16.96
15.94
15.56
25.83
23.94
98.23
19.65
4.86
Kalani Cables
12.79
16.42
7.41
6.79
9.11
52.52
10.50
4.05
Lanka Cheramic
14.21
15.56
11.26
13.38
17.15
71.56
14.31
2.23
Royal Cheramic
23.69
22.22
28.56
25.63
31.08
131.18
26.24
3.60
2006
1.38
2.23
6.15
12.43
7.41
1.17
12.59
10.23
8.57
24.03
2007
1.2
2.98
5.38
11.33
2.92
2.4
10.48
10.64
10.5
12.68
2008
0.39
-0.1
5.7
3.69
2.37
1.47
10.97
3.86
8.16
17.58
2009
1.36
-0.67
5.04
2.02
2.76
1.35
17.2
16.56
6.25
13.84
2010
2.79
0.84
7.68
0.76
9.64
1.31
15.85
4.26
17.15
21.66
Total
7.12
5.28
29.95
30.23
25.1
7.7
67.09
45.55
50.63
89.79
AVG
1.42
1.05
5.99
6.05
5.02
1.54
13.42
9.11
10.13
17.96
SD
0.86
1.54
1.02
5.44
3.30
0.49
2.98
5.25
4.207
4.88
2006
2007
2008
2009
2010
TOTAL
AVG
SD
ABANS
Acme
Central Industrial
ACL Cable
ACL Plastic
Lanka Aluminium
Chevron Lubricants
Kalani Cables
Lanka Cheramic
Royal Cheramic
8.69
13.52
43.19
19.46
15.25
10.30
37.60
14.60
14.61
16.65
9.38
14.24
16.01
24.67
7.23
14.8
48.18
23.19
15.70
14.91
9.32
8.49
16.46
13.07
10.27
12.33
43.66
9.77
11.96
17.47
8.07
13.70
13.51
6.89
9.03
12.04
88.68
9.77
12.41
15.47
13.34
0.82
16.49
5.80
18.96
9.89
67.18
11.64
15.92
21.33
48.80
50.77
105.66
69.89
60.74
59.36
285.3
68.97
70.6
85.83
9.76
10.15
21.13
13.98
12.15
11.87
57.06
13.79
14.12
17.16
2.07
5.71
12.39
8.09
4.83
1.95
20.85
5.61
1.84
2.59
2006
2007
2008
2009
2010
TOTAL
AVG
SD
ABANS
Acme
Central Industrial
ACL Cable
ACL Plastic
Lanka Aluminium
Chevron Lubricants
Kalani Cables
Lanka Cheramic
Royal Cheramic
26.22
50.39
20.45
38.78
18.11
24.33
74.36
25.2
56.72
23.92
46.82
45.5
23.98
52.36
11.15
30.41
81.5
35.53
60.85
21.61
31.07
19.59
19.94
29.15
20.19
30.98
64.38
17.28
18.7
24.56
31.26
34.32
17.32
13.68
15.08
25.21
91.75
13.6
20.49
23.74
83.98
2.27
19.43
11.32
23.89
26.67
91.34
19.93
23.19
30.36
219.35
152.07
101.12
145.29
88.42
137.6
403.33
111.54
179.95
124.19
43.87
30.41
20.22
29.05
17.68
27.52
80.66
22.30
35.99
24.84
23.73
19.69
2.41
17.23
4.86
3.02
11.64
8.51
20.92
3.28
Average
gross
profit ratio
Average
operating
profit ratio
Average
Net profit
ratio
Average return
on investment
Average
return on
capital
employed
ABANS
11.59
5.49
1.42
9.76
43.87
Acme
22.99
10.21
1.05
10.15
30.41
Central Industrial
26.49
10.45
5.99
21.13
20.22
ACL Cable
ACL Plasic
Lanka Aluminium
Chevron Lubricants
Kalani Cables
Lanka Cheramic
Royal Cheramic
19.93
10.64
9.25
28.40
19.59
24.11
42.84
12.55
10.18
4.71
19.64
10.50
14.31
26.23
6.04
5.02
1.54
13.41
9.11
10.12
17.95
13.97
12.14
11.87
57.06
13.79
14.12
17.16
29.05
17.68
27.52
80.66
22.31
35.99
24.83
Industry Average
21.58
12.43
7.16
18.18
33.25