Determinants Of Profitability: Evidence From Selected Manufacturing Company In Hawassa, Ethiopia

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Ayneshet Agegnew and Tripti Gujral


This study investigates the determinants of profitability of manufacturing companies. The research used secondary data obtained from the financial statements of manufacturing companies during the period 2012-2021. Explanatory research design and random panel model regression analysis were used. A sample of 10 manufacturing companies operating in Hawassa was included in the study, which consisting of 10 companies with 100 observations. The results of panel regression analysis showed that: firm size, growth and fixed asset ratio, have statistically significant and positive impact on profitability. On the other hand, liquidity, leverage and operating cost have a negative and statistically significant impact on manufacturing companies ‘profitability. Beside the study suggested for the stakeholders that give more attention on the major variable of the sectors such as operating cost. The results may not be generalizable to all manufacturing companies found in the city. The findings should provide manufacturing executives and managers with valuable information for developing their strategies with regard to firm specific determinants.

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