Abstract:
Management efficiency is an integral part
of the overall corporate strategy to create shareholder
value and for the survival of a business as it has direct
impact of firm’s profitability. This study investigates the
relationship between the management efficiency and
profitability for a sample of 20 manufacturing
companies listed on the Colombo Stock Exchange for
the period of 5 years from 2007 to 2011. Descriptive
and simple linear regression analyses were used to
study the relationship between management efficiency
and profitability. The results of the statistical test of the
hypothesis indicated that the relationship between
Fixed Assets Turnover has significant impact on
Return on Assets and it is positive. And also the
relationship between Fixed Assets Turnover and Net
Profit is positive but it is in significant. The relationship
between Total Assets Turnover and Return on assets is
positive and significant while the relationship between
Total Assets Turnover and Net Profit is positive and
insignificant while Working capital turnover is
insignificant in the study. The implication of this study
can be used by the managers to improve their financial
performance and formulate policies that will promote
effective assets management system.
