Effect of operational efficiency on financial performance of listed manufacturing firms in Zimbabwe (2017-2023)

Abstract

The study explores the impact of operational efficiency on the financial performance of listed manufacturing firms in Zimbabwe, focusing on data from 2017-2023. Operational efficiency, vital for reducing costs while maintaining quality, is measured using indicators such as total asset turnover ratio and operating expense ratios. The research delves into related variables, including firm size, leverage, and liquidity, to understand their collective influence on financial metrics like return on assets (ROA). Zimbabwe’s manufacturing sector, despite its historic significance, has faced declining contributions to GDP, high inflation, outdated infrastructure, and intense competition from imports, highlighting the urgent need for efficiency-driven strategies. The findings will provide insights for companies, investors, and policymakers, emphasizing the adoption of modern techniques like lean manufacturing, automation, and efficient resource management. The outcomes aim to enhance profitability, resilience, and competitiveness in Zimbabwe's volatile economic landscape, contributing to sustainable industrial growth.