Abstract:
Objective of this study is how macroeconomic variables have been affected
for the profitability of the listed manufacturing company and also, it is
considered how the interest rate, US$ exchange rate, GDP growth rate, and
inflation rate have been affected for the ROA and ROE of listed manufacturing
companies. There are 15 CSE listed manufacturing companies are used as the
target sample. Secondary data from 15 companies have been collected from
2010 to 2015, as quarterly. Macroeconomic data is collected from the central
bank of Sri Lanka and Colombo consumer price index for period of 2010 to
2015. Data is analyzed using multiple regression model. From the findings are
there significant negative relationship between inflation rate, US$ exchange
rate with ROA and ROE. Interest rate has positive relationship between
profitability but not significance as well as GDP growth rate has negative
relationship between profitability but it is also not significant. Listed
manufacturing company must pay more attention for the inflation rate and
exchange rate because negative relationship of inflation rate and exchange rate
is affected for the ROA and ROE of the company. If inflation rate and US $
exchange rate increase the profitability of manufacturing companies decrease
other hand decrease in inflation rate exchange rate increase the profitability of
listed manufacturing companies.
