8th Students’ Research Symposium 2019

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    A Study on Micro Finance Activities Impact on Living Standards of People in Badulla District, Sri Lanka
    (Department of Finance, University of Kelaniya, 2019) Gunapala, V.B.S.
    Introduction - The main aim of this research report is to identify the micro finance activities to living standard of people in Badulla area. It tries to investigate the impact between micro finance and living standard. Design/Methodology/Approach - Mainly primary data were used for the research. The primary data were collected through questioners, 100 in Abagahadowa and Nugathalawa villages. Filled the questionnaire, tests the normality. Correlation and regression analysis were used to investigate the relationship and impact between dependent and independent variables. Findings - The correlation result indicates there is strong positive relationship between independent and dependent variable. That implies micro finance activities of the People's Bank influence the improvement of the living standard of people. The researcher proves that some other factors also affect to improve living standard of people other than the micro finance activities. Conclusion - The research findings also indicate as a whole the study concluded that bank should more consider about the micro finance activities, because it will be the newly growing concept of developing countries. Micro finance along cannot improve the living standard of people. Finally, researcher gives the recommendation to improve the current position.
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    The value relevance of accounting information on stock market price for the investors’ decision. (With special reference to the financial ratios)
    (Department of Finance, University of Kelaniya, 2019) Rukshika, R.N.T.
    Introduction - The purpose of this paper is to examine the value relevance of accounting information on stock market price for the investor’s decisions. This study significant when making investment decisions. Design/Methodology/Approach - Sample consist with 35 manufacturing sector companies and used quantitative approach. Fixed effect panel regression analysis used as the methods of analysis. Findings - EPS, NAVPS, CEPS and NOCFPS have positive and significant relationship with stock market price and DPS has negative and insignificant relationship with stock market price. Conclusion - EPS, NAVPS, CEPS & NOCFPS are highly significant when making investment decisions. DPS is not significant for investors based on this research.
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    The effect of Free Cash Flow on Profitability of Listed Diversified Holding Companies in the Colombo Stock Exchange
    (Department of Finance, University of Kelaniya, 2019) Rajapaksha, R.S.D.
    Introduction - The purpose of this study is to identify the effect of free cash flow on the profitability on the Diversified Holding companies listed in the Colombo Stock Exchange. This study will facilitate individual and institutional investors with information to take appropriate decision, as this paper deliver whether the free cash flow actually influence on the profitability. Design/Methodology/Approach - The population consisted of nineteen (19) companies listed as Diversified Holdings on the CSE at June 2019. The Purposive sampling method is used to select a sample of 17 companies listed at CSE (panel data). Secondary data is extracted from audited annual reports and financial statements of firms, sourced from CSE for a period of five years (2014 –2019). Data analysis was done using a regression model since the nature of the data was quantitative using E views. Findings - Free cash flow have not significant impact on profitability of the listed diversified holdings companies in Sri Lanka. In the model, as per the given results through the analysis, it can be concluded that, firm size and the Lag value of ROCE have a significant impact on the firm profitability. Conclusion - The study concludes that free cash flows does not have a significant impact on company performance because the free cash flows create an agency problem due to this the conflict of interest increased between owner and management and because of such conflict firm performance decreases. And also problems related to the piking order theory were begun.
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    The Macroeconomic Factors Affecting Exchange Rate: Analysis of the ARDL Model
    (Department of Finance, University of Kelaniya, 2019) Kumari, D.K.G.S.K.
    Introduction - The purpose of this study is to identify the impact of macroeconomic factors on the exchange rate for the period of 2009-2017. Design/Methodology/Approach - Data is collected from secondary data sources by Web site of Central Bank of Sri Lanka data library under the economic indicators and Web site of Senses and Statistic Department. The sample is monthly time series data over the period of January of 2009 to December of 2017. Auto-Regressive Distributed Lag model is used to analyze the long run relationship between selected macroeconomic variables and exchange rate (used E-views 9 version). Findings - Auto regressive Distributed Lag (ARDL) model discovered there is a negative significance relationship between inflation rate and exchange rate. As well as positive significant relationship between the import and exchange rate. In this model interest rate and export are insignificant relationship with exchange rate movement. Conclusion - Paying more attention towards the time span can also be increase in the future studies and suggest using quantitative as well as qualitative macroeconomic factors affecting to the exchange rate for further researches.
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    Impact of Capital Structure on Firms’ Financial Performance: Evidence from Listed Hotel and Travel Companies
    (Department of Finance, University of Kelaniya, 2019) Lakmal, P.I.
    Introduction - The purpose of this study is to identify the effect of capital structure on firms’ financial performance of listed hotel and travel companies in Colombo Stock Exchange. This study will facilitate individual and institutional investors with information to make the appropriate decision, as this paper delivers whether the capital structure influences the firm financial performance. Design/Methodology/Approach - The population consisted with 384 companies listed as Hotel and Travel sector on the CSE in June 2019. The Purposive sampling method is used to select a sample of 10 companies listed at CSE (panel data). Secondary data was extracted from audited annual reports and financial statements of firms, sourced from CSE for a period of five years (2014 –2019). Data analysis was done using a regression model since the nature of the data was quantitative using E views. Findings - The Debt to Equity ratio found with a negative statistically significant impact on ROA. Also, Debt to Equity ratio and ROE has an insignificant positive relationship while debt to equity ratio is significantly and positively impact on EPS. Also, the overall models are significant at 5% confidence levels. Conclusion - The Capital structure has a significant impact on the financial firm performance of the listed Hotel and Travel companies.
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    Determinants of Capital Structure of Commercial Banks of Sri Lanka
    (Department of Finance, University of Kelaniya, 2019) Malka, N.H.G.
    Introduction - The purpose of this paper is to identify the determinants of the capital structure of commercial banks of Sri Lanka. Design/Methodology/Approach - The study based on a quantitative approach and used panel data for the multiple regression model. Entire 26 commercial banks are considered for the population, where 12 listed commercial banks are used as sample for the study. Findings - The results of this study show that tangibility (TANG), profitability (PROF), size (SIZE) and growth (GROW) insignificant for commercial banks' capital structure. Non-debt tax shield (NDTS) has a positive significant influence on the total debt ratio. Conclusion - As per the reviews of previous empirical studies, both the positive and negative relationships among the determinants of capital structure have revealed. So there is a mixed relationship between capital structure determinants. According to this study output, out of five independent variables only the Non-debt tax shield (NDTS) has a positive significant influence on the total debt ratio and other four independent variables (tangibility, profitability, size, growth) are insignificant.
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    Impact of Macroeconomic Variables on Corporate Capital Structure; A Case of Listed Manufacturing Firms in Sri Lanka
    (Department of Finance, University of Kelaniya, 2019) Wijenayaka, R.V.H.E.
    Introduction - The purpose of this study is to examine the effects of macroeconomic conditions on capital structure decisions of manufacturing firms listed in the Colombo Stock Exchange. Design/Methodology/Approach - A panel data covering a period of 05 years from 2014 to 2019 for 10 listed manufacturing firms in Colombo Stock Exchange used while random effects model is used to analyze the data. Findings - The empirical results stated that, in overall macroeconomic conditions have significant effects in determining the capital structure decisions of the manufacturing firms listed in Sri Lanka. GDP growth rate, interest rate and profitability are significantly impact to the firms’ leverage of manufacturing sector. Moreover, exchange rate, corporate tax rate and firm size are found to be insignificant in determining the capital structure choice of the Sri Lankan manufacturing firms. Conclusion - There is an impact of macroeconomic variables on capital structure and there are some other factors which are affecting the leverage of firms rather than external variables.
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    Impact of Macro - Economic Factors on the Performance of Stocks and Treasury Bonds in Sri Lanka
    (Department of Finance, University of Kelaniya, 2019) Gunarathna, T.S.P.
    Introduction - The purpose of this study is to identify the impact of macroeconomic factors on the performance of Stocks and Treasury bonds. Design/Methodology/Approach - Data is collected from secondary data sources by referring annual reports of Central Bank in Sri Lanka, Data library CD which is issued by CSE and economic statistical tables presented on World Bank website. The sample is monthly time series data over the period of 2009 to 2018 and multiple regression model is used to analyze the data from Eviews (9th version). Findings - Interest rate has a negative effect and inflation rate has a positive effect on the performance of stocks while interest rate having a positive impact on the performance of bonds. Conclusion - Paying more attention towards the macroeconomic policies and suggest to use quantitative as well as qualitative factors affecting to the performance of stocks and bonds for further researches.
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    Impact of Firm Specific and Corporate Governance Factors on Capital Structure - Evidence from Sri Lanka
    (Department of Finance, University of Kelaniya, 2019) Ranasinghe, U.D.W.
    Introduction - The aim of this empirical study is to explore the firm specific and corporate factors that affect the capital structure of manufacturing firms in Sri Lanka. In more recent studies, researchers have focused on the relationship between internal factors, corporate governance factors and capital structure decisions of the firm separately. However, this study examines the relationship between firm specific and corporate governance factors on capital structure together. Design/Methodology/Approach - The investigation is performed using panel data procedures for a sample of 15 manufacturing firms out of 38 listed on the Colombo Stock Exchange during 2011-2018. Panel regression analysis is used to analyze the collected secondary data. Findings - The results suggest that earnings volatility and board independence are related negatively to the debt ratio, whereas non-debt tax shield, growth opportunities and board size is positively linked to the debt ratio. Conclusion - This study has laid some groundwork to explore the determinants of capital structure of Sri Lankan firms upon which a more detailed evaluation could be based.
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    Corporate Governance and Company Performance. Are They Related? Evidence from Non-Bank Financial Institutions in Sri Lanka
    (Department of Finance, University of Kelaniya, 2019) Hasitha, M.M.D.
    Introduction - Corporate governance became an emerging topic from last few decades since the worldwide collapses of giant companies. This study is focusing on how the compliance with corporate governance guidelines effect to the performance on selected non-bank financial institutions in Sri Lankan context. Design/Methodology/Approach - Data were collected from twenty-six financial institutions except banks from year 2015 to year 2019. Multiple regression is used to analyse the data. Based on two dependent variables called Return on Assets (ROA) and Earnings per Share (EPS), two separate regression lines with two independent variables as Board Size (BS) and Board Composition (BC) have been introduced. This study is based on two hypotheses. The first, there is a relationship between board size and company performance. And the second, there is a relationship between board composition and firm performance. Findings - Based on my findings, it can be concluded that board size and company performance are related since BS and EPS have significant positive relationship. Nevertheless, BS and ROA have no significant relationship. When considering about the independent directors composition in the board, there is a positive relationship between EPS and BC but statistics are insignificant. Conclusion - These findings have confirmed by previous studies and some research studies are providing contradict evidences to this study.