The Influence of Administration Expenses on the Profitability of the Listed Manufacturing Companies in Tanzania

Abstract

Globally, the issue of administration expenses and their contribution to company profitability has caught the attention of many scholars. Several scholars have conducted studies on the relationship between administration expenses and company performance (Lekan, Emerole, & Serieke, 2018; Liang, Guo, & Zhou, 2020; Oluwafemi, 2022). However, there are limited scholarly articles that use DuPont analysis to explain company profitability as a response variable to administration expenses or employee compensation as an explanatory variable.

However, there are limited scholarly articles that used DuPont analysis to explain company profitability as a response variable to administration expenses. The study used an explanatory research design whereby all data for the explanatory and response variables were collected from financial statements of six listed manufacturing companies. The results indicate that administration expenses have a negative influence on the profitability explained by DuPont. This implies that if the companies would want to successfully increase their market share, increase customers, and their profitability then they must spend less on administration expenses which will ensure saving of cash for re-investment and be able to meet their other financial obligations.