Browsing by Author "Abeywardhana, D.K.Y."

Now showing 1 - 20 of 46

Board Financial Expertise and Dividend Paying Behavior of Sri Lankan Firms
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Karunarathna, W.D.N.K.; Abeywardhana, D.K.Y.
Dividend behavior is most debatable and inconclusive issue in the corporate finance. Various theories and studies have been developed based on the dividend behavior issues but still the dividend is an unresolved corporate finance problem. Therefore this study aims to use a new dimension called financial expertise on corporate board to explain the dividend policy behavior. Further, this research focus on investigating the relationship between board financial expertise and dividend paying behavior of firms in Sri Lanka. In this study, Lagged Dividend Yield, Proportion of Financial Experts on Board, Firm Size, Companies’ Profitability, Tax Efficiency, Retained Earnings and Leverage are considered as independent variables and Dividend Yield which is measuring the dividend paying behavior of firms is considered as the dependent variable. This study uses correlation and regression analysis to investigate and analyze secondary data of 60 non – financial listed firms which are registered in the Colombo Stock Exchange (CSE) and 420 firm year observations from 2014 to 2020. The findings of this study reveals that financial expertise on corporate board is positively related to dividend payments. Further, the results reveal that Sri Lankan firms use dividends as a control mechanism to mitigate the agency conflict to protect shareholders’ interests. Less attention has been given by the researchers on the board financial expertise as a dividend policy determinant in Sri Lankan context and findings of this study will useful for corporate decision makers, academic students, financial analysts as well as future researchers.
Capital Structure and Profitability: An Empirical Analysis of SMEs in the UK
(2015) Abeywardhana, D.K.Y.
This study examines the relationship between capital structure and the profitability of non- financial SMEs in the UK for the period of 1998-2008. Using the Two Stage Least Squares, (2SLS) the results show a significant relationship with capital structure and profitability which is negatively related. The size of the firm appears a more important factor that determines the profitability in SMEs in the UK. There is consistent evidence for positive size- profitability relationship. The results of this study have shown that the capital structure of the firm has a significant influence on the profitability of SMEs in the UK. Especially, long-term debt to total assets ratio is negatively related with the profitability and this is an indication that SMEs are averse to use more equity because of the fear of losing the control.
Classification of lease assets
(Department of Accountancy, University of Kelaniya, 2014) Madusanka, G.P.; Abeywardhana, D.K.Y.
Comparison between Economic Value Added (EVA) and Accounting Measurements in Predicting Stock Return in Listed Manufacturing Companies in Sri Lanka
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Nishadi, W.W.D.M.; Abeywardhana, D.K.Y.
The objective of this research is identifying the best measurement and provides suggestions to predict the stock return in Sri Lanka considering the listed manufacturing companies of Colombo stock exchange. Economic value added (EVA), Net Profit (NP), and Net Operational Profit after Tax (NOPAT) is independent variables, and stock return is dependent variable in this study. Data collected from using annual reports of 20 manufacturing companies for the period of 2010 to 2016. The findings show that there is a positive relationship between the stock return and all the independent variables. NOPAT is the most important measure in predicting the stock return. Further this study suggested that random effect model should be accepted and then it explain that differences among entities have some influence on the dependent variable. Accounting measures are better in predicting stock return than EVA.
Debt Capital and Financial Performance: A Study of South African Companies
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Magoro, K.M.R.; Abeywardhana, D.K.Y.
The purpose of this study is to examine how debt capitals of the listed companies operating in the wholesale and retail sector of South Africa affect their financial performance. The study used a panel data sample of 25 South African wholesale and retail sector companies to examine the impact of debt capital on the financial performance of companies over the 2011-2015 period. Fixed-effects (within) regression model was used on the accounting-based-measures of profitability and financial performance. The study confirms that debt capital, in terms of short-term debt and long-term debt, has a negative impact on the financial performance of wholesale and retail sector companies of South Africa. The findings of this research will help South African wholesalers and retailers to understand the impact of debt capital on company performances. This study will help them make decisions that will ensure profit maximization and reduction of costs associated with debt, and ultimately, maximization of shareholders’ wealth. This study gives special focus to the wholesale and retail sector as it seeks to pioneer the addressing of root causes and reasons of research contradictions in this study area.
Detecting Financial Statement Frauds Using Beneish Mscore Model Evidence from Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Nimhan, K.A.R.; Abeywardhana, D.K.Y.
Financial statement manipulation refers to the practice of using creative accounting treatments to make a company’s financial statements reflect what the company wants its performance to look like rather than its actual performance. Financial statements are the outcomes of the accounting process that are used by investors, shareholders, management, and other third parties to make various decisions. As a result, one of the greatest challenges facing companies, institutions, and organizations in the twenty-first century is financial statement fraud, which is increasing in quantity and size, affecting people's trust in the credibility of financial statements and corporate reports. Therefore, this study aims to identify the indications of financial statement fraud in public listed companies in the Colombo Stock Exchange (CSE) and to study how the different sectors are affected by the financial statement frauds by applying the Benish M-Score model. The sample of this study consists of all the companies listed in CSE excluding bank, insurance, and diversified financials industry group between for the period of 2016-2020. Accordingly, this study uses secondary quantitative data by using annual reports of the listed companies. The Beneish M-score model has been applied to different listed companies worldwide in order to detect the existence of income manipulation. Therefore, this study concentrates more on these concepts in order to detecting financial statement frauds in Sri Lanka. This study is very useful to the users of financial statements in Sri Lanka.
The Effect of Dividend Payment and Retained Earnings on Market Price of Equity Shares: A Study of Manufacturing Companies in Sri Lanka
(4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Girihagama, T.D.K.; Abeywardhana, D.K.Y.
Price of publicly trading share is determined by supply and demand in the share market. If there is a high demand for a share due to favorable factors, the price would increase. It is important to identify that factors which have significant effect on share price. According to previous researchers; such factors that have effect on share price could be either firm specific internal factors such as; retained earnings, dividend, size of the firm etc. or external factors such as; interest rate, government regulations, foreign exchange rate etc. This study is an attempt to identify the effect of two internal factors: dividend payment and retained earnings on share price. The study has been carried out for period of 10 years (2008-2018) with a focus on 35 manufacturing companies listed in Colombo Stock Exchange. The relationship between share price and two main variables were examined by multiple regression model. The primary regression model was expanded by adding control variables: firm size, earning per share (EPS) and dividend yield. The findings of this study shows that dividend payment and retained earnings have a significant impact on share price. It also revealed that DPS and EPS are having a significant positive relationship with share price while dividend yield and retained earnings are having significant negative relationship with share price. Size of the firm shows insignificant effect on share price
The Effect of Firm Size on Financial Leverage: Evidence from Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Siriwardana, D.B.; Abeywardhana, D.K.Y.
Leverage is simply the amount of debt used to finance assets by a company. Firm size, profitability, tangibility, and firm age are some factors that influence financial leverage. Among these, one of the most important factors influencing financial leverage is firm size. The financial leverage of each company is unique, and it varies according to firm size. It has an impact on the firm's value since it determines the best capital structure by balancing the cost of capital and return on investment. There is a debate about the behavior of a firm's financial leverage based on its size and no absolute research study based on the effect of firm size on financial leverage of both manufacturing and service sector companies in the Sri Lankan context. So, this study investigates the effect of firm size on financial leverage of manufacturing and service sector companies in Sri Lanka. The study is conducted quantitatively. Use data from 2015/16 to 2019/20 over five years. The sample consists of 15 manufacturing and 15 service companies that are listed on the Colombo Stock Exchange. The dependent variable is financial leverage, while the independent variable is firm size. The study use firm age, asset tangibility, and profitability as control variables. A regression model is used to analyze data in the study. The study found that firm size is positively and significantly affected to the financial leverage in both manufacturing and service sector companies in Sri Lanka.
Effect of Leverage on Firm Growth: With Special Reference to Food, Beverage and Tobacco Companies Listed in Colombo Stock Exchange
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, 2020) Aberathna, H.P.D.C.N.; Abeywardhana, D.K.Y.
This study investigates the effect of leverage on firm growth with special reference to the food, beverage and tobacco companies listed in Colombo Stock Exchange. The relationship between leverage and firm growth in food, beverage and tobacco industry in developing countries have not adequately addressed in the previous literatures and there is a debate in findings of previous researches about the relationship between leverage and firm growth. The main problem of this study is to investigate whether the leverage influences negatively or positively on signaling the firms’ growth. This study uses secondary data from annual reports of every selected company for 5 years. The sample comprises 20 firms from 2015-2019. This study will use a panel regression model to examine the relationship between variables. Overall leverage, long-term leverage and short term leverage are used as independent variables and Revenue Growth rate is used as the dependent variable. In addition, firm size and Asset Tangibility use as control variables in the econometric model. According to the results of this study managers can optimize firm revenue and firm growth by changing financial leverage. The findings of this study will help to managers and further researchers to get an idea about the effect of the leverage on firm growth.
Factors Effect on Employee Turnover Intention: Evidence from Leasing Industry in Sri Lanka
(Faculty of Graduate Studies, University of Kelaniya, 2015) Wickramasinghe, A.I.N.K.; Abeywardhana, D.K.Y.
This study investigates the turnover of young and fresh employees in the leasing industry in Sri Lanka. Employee turnover has become a common phenomenon and it results in career changes and job mobility. Nevertheless, every single organization will have to deal with the turnover of employees. However, the turnover of desirable employees may have a significant impact on the organization, rather than the less productive ones. This research is based on the major factors that influence job satisfaction and in turn will reflect on an employee‘s intention to quit or not. Annual reports in the leasing industry show that the turnover ratio fluctuates from 8% to 25%. The key factors to be considered are, work-family life balance, career development opportunities, compensation and benefits, perceived supervisory support, employee performance management and job security. Previous researchers have focused on western countries aiming at all levels of employees. This study conducted is based on 14 leasing companies with a sample of 116 young employees. The qualitative research method was used where a questionnaire survey forms were handed over to the participant‘s age between 22 and 32 to fill, using simple random and snowball sampling technique. Correlations and regression tests were performed. The results indicate that the turnover intentions on particular variables were more complex than previously assumed. Main reasons for turnover intentions were the work-family life balance, career development opportunities and perceived supervisory support. Piecemeal investigations of this sector provide inadequate information; hence dearth of information on the finance sector in Sri Lanka is a major weakness.
Firm Growth, Access to Capital Markets and Financial Structure: Evidence from Listed Firms in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Madushanka, E.R.N.R.; Abeywardhana, D.K.Y.
This study investigates the financial structure of listed firms with an emphasis on growth and access to capital markets. Focus of this study is on how the company's growth and capital market access affects the company's financial structure. Accordingly, the independent variables are profitability, asset structure, firm size, age, the growth rate in sales and the dependent variable is debt ratio. This study is based on 20 listed service and manufacturing firms for the period of ten years from 2011 to 2020. Descriptive analysis, Regression model use to analyze the data. This study uses the Pecking order theory to show how the company’s growth and capital market access affect the company’s financial structure. The result of this study shows that Profitability, Asset structure, Firm size, Age, and Growth rate in sales do affect the financial structure of firms.
The Impact of Ageing Population on Economic Growth in South Asia
(Asian Social Science, 2019) Abeywardhana, D.K.Y.
The share of working age population has declined all over the world. It is forecasted that this will continue for the coming years in all countries in South Asia. Low growth in working age population in South Asia will be effecting negatively for the economic growth. This paper studies whether the South Asia 2050 employment targets would be sufficient to compensate for the downward impact of demographic burden and whether the impact of demography on economic growth differs between South Asian countries. The results show that degreasing working age population is the main challenge the South Asian region faces. Further it shows that growth in GDP mainly depend on the demographic change. Population who contributed the economic development become maturing and dependents of their children. The consumption of the ageing population is very high as of higher spending on healthcare facilities. This effect badly on the economic growth in the region and cause lots of challenges to the nations.
The Impact of Capital Adequacy Ratio on Bank Risk-Taking Behavior: Evidence from Local Commercial Banks in Sri Lanka
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2023) Thilakarathne, U.R.S.; Abeywardhana, D.K.Y.
This study investigates the relationship between capital adequacy ratio (CAR) and default risk (DR) among local commercial banks in Sri Lanka. Utilizing a panel dataset spanning from 2012 to 2022, the study employs a random effects regression model to analyze the impact of CAR on DR, controlling for bank profitability (BP), bank size (BS), and bank interest rate (I). The findings reveal a complex relationship between CAR and DR, suggesting that a higher CAR may not always lead to a lower level of default risk. This counterintuitive finding challenges the conventional understanding of CAR as a standalone measure for mitigating risk. The study also identifies a positive and statistically significant relationship between BS and DR, emphasizing the need for enhanced risk management practices, particularly for larger banks.
Impact of Capital Structure on Firm Performance: Evidence from Manufacturing Sector SMEs in UK
(2015) Abeywardhana, D.K.Y.
The purpose of this study is to investigate empirically the impact of capital structure on firm performance. This study examined the impact of capital structure on firm performance of manufacturing sector SMEs in UK for the period of 1998-2008. The authors hypothesize that there is a negative relationship between capital structure and firm performance. To examine the association, the authors run a Pearson correlation and multiple regression analysis. Results of this study reveals that there is a significant negative relationship between leverage and firm performance (ROA, ROCE), strong negative relationship between liquidity and firm performance and highly significant positive relationship between size and the firm performance. This study concluded that firms which perform well do not rely on debt capital and they finance their operations from retained earnings and specially SMEs have less access to external finance and face difficulties in borrowing funds. It is recommended that firm should establish the point at which the weighted average cost of capital is minimized and to maintain the optimal capital structure and thereby maximize the shareholders wealth
The Impact of Capital Structure on Firm Survival during the Covid – 19 Pandemic in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Sewwandi, H.Y.R.; Abeywardhana, D.K.Y.
The Covid – 19 has redefined the world operation. Specially Covid – 19 pandemic shows a significant impact on the business field. Accordingly, this study aims to investigate the impact of capital structure on firm survival during the Covid – 19 pandemic in Sri Lanka. For the purpose of the study, Return on Asset (ROA), Earning per Share (EPS) and Tobin’s Q have been selected as firm survival indicators which is the dependent variable. Total debt to asset ratio has been used to measure the capital structure, which is the independent variable of the study. Asset Tangibility, Revenue Growth Rate, Cash Flow Volatility and Firm Size are the control variables. The data of the study covers 200 listed companies in the Colombo Stock Exchange (CSE) in Sri Lanka for the period of 4 years from 2018 to 2021. This study employs Regression analysis to investigate this relationship. Finding of the study will be useful to policy makers in developing policies on corporate finance and to managers in formulating strategies to increase firm value and firm survival by considering changes in capital structure and its impact on firm survival during the Covid – 19 pandemic. Covid - 19 is not limited to some industry but it immensely impacted the publicly traded firms in Sri Lanka and affected the relationship between capital structure and firm survival.
Impact of Credit Rating on Capital structure: with Special Reference of Banking Sector in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Gamage, N.D.; Abeywardhana, D.K.Y.
Credit Rating is used to determine credit worthiness. Capital structure plays the most significant role in the firm’s financial decision making. The main purpose of this research is to measure the impact of credit Rating on capital structure. This study conducts using the quantitative approach. This research based on 24 listed Banking companies in Colombo stock exchange (CSE), employing secondary data for 5 years from 2015 to 2019. To analyze data regression analysis use. Capital structure is measure using Total liabilities over total assets and Credit rating measured by using Return on Asset (ROA), Return on Equity (ROE), Return on Capital Employed (ROCE), Current asset over current liability, and fixed assets over total. The study will be useful to investors, lenders, borrowers, policy maker and managers to use their decision-making process. In this research findings will be different credit rating level are associate with discrete cost and benefits to the firm.
The impact of credit risk on bank profitability: with special reference to Sri Lankan commercial Banks
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Wickramasingha, M.P.; Abeywardhana, D.K.Y.
Credit granting is one of the main incomes generating activity in commercial banks. The risk related to credit affects the profitability of the banks. A number of researches have also revealed that there is a powerful relationship between credit risk and profitability. The objective of the study is to assess the impact of credit risk on profitability. Foreign countries have conducted number of studies related to this topic. Similarly, there are no sufficient studies have been conducted in Sri Lanka. Four commercial banks were selected for the study and data was collected through the published annual reports of the Central Bank of Sri Lanka (CBSL). The selected four banks consisted with two state owned banks and two private banks from Sri Lankan commercial banking sector. Return on Equity (ROE) and Return on Asset (ROA) were used as profitability indicators while Gross Non-Performing Loan (GNPL) ratio was used as an indicator of credit risk. The impact of credit risk on profitability is assessed using Ordinary Least Square (OLS) regression and exploratory data analysis. Furthermore, results indicated a statistically significant positive relationship between credit risk and profitability of commercial banks. Therefore, the findings concluded that credit risk positively affects the profitability in commercial banks. Findings of this study contribute to formulate efficient and effective credit risk management control policies for commercial banks.
The Impact of Debt Maturity on the Relationship between Financial Leverage and Future Financing Constraints
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Sandeepa, H.J.M.; Abeywardhana, D.K.Y.
The prior literature pay less attention to the effect of debt maturity on the relation between leverage and financing. To fill this gap, this study aims to investigate the impact of debt maturity on the relationship between financial leverage and future financing constraints. In accordance with the main objective of the study, this analyzes the moderating role of short-term debt and the mediating role of future financing constraints in the relationship between financial leverage and future investment. Financial leverage is used as the independent variable while investment used as the dependent. At the same time financing constraints used as a mediator variable and shortterm debt used as a moderator variable. The study used secondary data of 50 companies representing all the industries in CSE excluding banking and financial institutions covering the period of 2013 to 2020. Data were analyzed using regression and E-Views packages. Since the results of the prior studies were paradoxical, this study will result in that the diversification of short-term debt (STD) to long-term debt (LTD) ratio is the reason for the contradictory results of previous studies. The results will give directions in order to make decisions regarding the investments and financing debts as this study address one of the most important issues in the capital market.
The Impact of Dividend Policy on Shareholders’ Wealth and Business Performance of Listed Manufacturing Companies in Sri Lanka
(4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Dilshani, L.D.C.; Abeywardhana, D.K.Y.
The Dividend policy play a major role in current business as most important financial policy not only from the viewpoint of the company, but also from that of the shareholders, the consumers, employees, regulatory bodies and the government. The study aims to identify how the dividend policy influences the shareholders ‘wealth and the business performance of listed manufacturing companies in Sri Lanka. Dividend per share (DPS) and Dividend yield (DY) use as Dividend policy indicators while Return on Equity (ROE) use as business performance indicator and earning per share (EPS) and Market share price (MSP) use as shareholders’ wealth indicator. The study use secondary data of 30 manufacturing companies covering the period of 2012 to 2017. Data analyze using regression analysis. The result reveals that dividend policy has significant positive impact on shareholders’ wealth and the business performance of listed manufacturing companies in Sri Lanka. The previous empirical studies provide evidences that dividend policy has significant positive impact on shareholders’ wealth and the business performance
The Impact of Dividend Policy on Shareholders’ Wealth and Business Performance of Listed Manufacturing Companies in Sri Lanka
(4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Dilshani, L.D.C.; Abeywardhana, D.K.Y.
The dividend policy plays a major role in current business as most important financial policy not only from the viewpoint of the company, but also from that of the shareholders, the consumers, employees, regulatory bodies and the Government. The study aims to identify how the dividend policy influences to the shareholders ‘wealth and the business performance of listed manufacturing companies in Sri Lanka. Dividend per share (DPS) and Dividend payout (DPO) were used as Dividend policy indicators while Return on Equity (ROE) used as business performance indicator and earning per share (EPS) and Market share price (MSP) used as shareholders’ wealth indicator. The study used secondary data of 41 manufacturing companies covering the period of 2012 to 2017. Data were analyzed using regression analysis and EViews package.The result reveals that dividend policy has positively significance impact on shareholders’ wealth and the business performance of listed manufacturing companies in Sri Lanka