Determinants of the Financial Performance of the Plastic Industry: With Special Reference to Primex Lanka Plastic Private Limited

Abstract

This study investigates the determinants of financial performance of the Primex Lanka Plastic Private Limited which is a leading polythene manufacturing company in Sri Lanka. This study focused on three specific objectives as to explore; (i) the behavior of the firm specific variables, (ii) the association between variables and (iii) the highest influential variable to the financial performance. The study employed the deductive approach using the secondary data over the period from May 2012 to May 2017 monthly. Multiple regression models explored the result on three alternative models. Out of two dependent variables, Return on Assets (ROA) finally given the significant results on three models. First and second model indicated that equally liquidity, leverage, management efficiency, interest expense and interest rate are significant on ROA while third model explored that liquidity, leverage, management efficiency, interest expense are significant on ROA. Out of that, leverage has showed highest effect on regression models. According to the selected determinants, firm specific factors are highly influence to the company financial performance rather than macro-economic factors. Empirical findings of this study may helpful for policy makers and senior management of the Primex Lanka Plastic (Pvt.) Ltd to craft their strategic decisions highlighting the firm specific determinists for the best performance.