| Abstract: | Determinant of profitability of large manufacturing leather companies of Addis Ababa in Ethiopia.
This study sets out to examine the determinants of the leather industry profitability specifically
focused on large manufacturing companies of the sector who submitted their annual financial
statements report to LTO partially from during the period 2008 up to 2018 and partially from
2014 to 2018. Consequently, the researcher used secondary data obtained from the financial
statement balance sheet and income statement of leather companies. The study used
explanatory research design to check the relationship between dependent variable profitability
and independent variables (liquidity, capital adequacy, leverage, tangibility of asset, firm size,
managerial efficiency, and inflation). The regression result showed that , firm size, tangibility of
asset, and capital adequacy have statistically significant and negative impact on profitability but
managerial efficiency has statistically insignificant and negative impact on profitability, on the
other hand, leverage, liquidity and inflation have statistically insignificant and positive impact on
profitability. Quantitative research approach was adopted. The study conclude managerial
efficiency has negative impact on profitability so the stakeholders that give more attention on
managerial efficiency. The researcher recommend that the manager should have to consider how
they utilize firms’ resource efficiently and effectively. |
