Determinants of Profitability and Financial Management Food Processing Enterprises in Wolaita Zone, Ethiopia

Abstract

The ultimate goals of any economic activity is making profit, it was increase return of equity and promote income generation of food processing enterprise. Study was conducted Wolaita Zone in Southern Nation Nationalities Regional State. With the main objectives to describe factors that affect profitability of food processing enterprise in the study area. In order to attain this objective the study cross-sectional survey data was employed food processing enterprise. Sample respondents of food processing enterprise members were managers and experts within the enterprise. Multi-stage sampling techniques employed to select enterprises by using Yamane (1967) formula with 5 per cent precision and 95 percent confident level.  The researcher used both primary and secondary data .The primary Data collected by using interview schedule through face-to-face interview and secondary data collected from different sources. The required number of sample was draw from six towns in the study area. Multi stage sampling techniques was employed to draw an appropriate sample. data wasanalyzed both descriptive summary statistics and econometric model of binary logit regression through econometric software of STATA. The STATA output r-square 0.779 (78%) reveals that the data fit the regression model while the higher r-squared indicates a better fit for the model.Multiple regression analysis from ten independent or explanatory variables six are statistically significant at 1%.5% and 10% level of statistics in dependent variable; five independent variable are positive relationship with dependent variable and one independent variable are negative relationship with dependent variable .The sampled food processing enterprise 91% is profitable and 9% none profitable.The gross prfite of  group ratio is 15.74 that implies the enterprise is more profitable in the study period.