Abstract:
This paper investigates the effects of impairment of assets on profitability and capital
structure of listed manufacturing companies in CSE in Sri Lanka. The study data have been collected
from the financial statements during a five years periods of 2008-2012.The study attempt to find the
answer to the question that does impairment of assets affect the profitability and capital structure of
the companies?. The study sample consists of 37 companies. Impairment loss is independent
variable and profitability and capital structure are dependent variables. The descriptive statistics
were used and then Pearson's correlation coefficient was used to identify the relationship between
the variables. The regression analysis was used to identify the impact of impairment loss on
profitability and capital structure. The study found that impairment of assets was found to have a
negative impact on profitability and capital structure. The findings also confirmed that changes by
impairment have significant impact on profitability and capital structure in case of listed
manufacturing companies in CSE.
