13th Students’ Research Symposium 2023/2024
Permanent URI for this collectionhttp://repository.kln.ac.lk/handle/123456789/29096
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Item The Moderating Impact of Financial Performance and Stock Returns on the Relationship Between Corporate Governance and Corporate Value. Evidence from Top-Rated Companies in Sri Lanka’s S&P SL 20 Index(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Abeywickrama, H. W. A. D. S.; Kethmi, G. A. P.Introduction: This research demonstrates how financial performance and stock returns moderate the link between corporate governance and corporate value. The study has been conducted on firms in the S&P SL 20 Index. It addresses how sound governance mechanisms affect firm value, and how stock returns and financial performance either enhance or suppress these impacts. Methodology: The study uses a quantitative research methodology where data from 20 listed firms in the S&P SL 20 index is analyzed over the period 2014 to 2024. To conduct this analysis secondary data from annual and quarterly reports were utilized. The diagnostic test used the Panel data analysis to assess the model's validity. Further, to analyze the moderate effect of stock return and financial performance regression models were developed. Findings: This analysis shows a significant relationship between corporate governance and corporate value, a weakly positive relationship. Stock returns moderate the relationship between better corporate governance and corporate value. Financial performance, which is measured through ROA and ROE also enhances the link between good corporate governance and corporate value. Conclusion: The study supports the importance of proper governance structures in the development of corporate values. The findings are informative for policymakers and investors, calling for efforts to build governance mechanisms in firms while relying on financial indicators and market conditions to increase firm value.Item The Impact of Leverage on the Profitability of Commercial Banks in Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Kaushalya, A. P. H.; Liyanage, M. L. D. C. J.Introduction: This study investigates the impact of leverage on profitability in Sri Lanka's licensed commercial banks from 2020 to 2023 (using quarterly data), focusing on indicators such as Degree of Financial Leverage (DFL), Degree of Operating Leverage (DOL), Debt-to-Equity Ratio (DER), and Asset Growth. It aims to understand how excessive leverage, amidst fluctuating economic conditions, might affect both financial stability and profitability. Methodology: This quantitative study analyzes the impact of leverage on the profitability of 10 licensed commercial banks in Sri Lanka from 2020 to 2023 using secondary data from quarterly financial statements. Key leverage variables—Degree of Financial Leverage (DFL), Degree of Operating Leverage (DOL), Debt-to-Equity Ratio (DER), and Asset Growth—are assessed for their relationship with Return on Assets (ROA), which measures profitability. The study employs regression analysis to determine the influence of leverage on profitability, with correlation analysis examining the strength and direction of these relationships. Diagnostic testing ensures the reliability of the regression model by addressing potential issues like multicollinearity and heteroscedasticity. Findings: The overall regression model was found to be statistically insignificant with an R-squared value of 0.0349, indicating a poor fit. Among the independent variables, only DER showed a significant positive relationship with ROA, suggesting that higher debt relative to equity correlates with improved profitability. The other variables, DFL, DOL, and Assets Growth, were not significantly related to ROA. This implies that while DER can be a factor in enhancing profitability. Conclusion: The study concludes that traditional leverage measures, such as DFL and DOL, have no significant impact on bank profitability, while DER shows a marginally positive effect. Asset growth alone does not significantly enhance profitability. Therefore, banks should focus on optimizing their capital structure, improving operational efficiency, and managing assets strategically. Policymakers should promote sustainable leverage and better risk management. Researchers should explore other profitability determinants, and investors should prioritize banks with balanced leverage and effective asset management for sustainable growth.Item The Impact of Firm-Specific and Macroeconomic Factors on Financial Performance: Evidence from Companies in the Listed Food, Beverage and Tobacco Industry in Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Tharindra, N. B. A. N.; Tennekoon, S. T. M. S.Introduction: Financial performance is a crucial aspect of assessing a company's overall financial health and can provide insights into its profitability, efficiency, and growth potential. A firm's financial performance is influenced by both internal (micro) and external (macro) factors. The purpose of this study is to examine the impact of firm-specific and macroeconomic factors on the financial performance of companies listed in the food, beverage and tobacco industry in Sri Lanka. Methodology: The population was forty-five listed food, beverage and tobacco firms in Sri Lanka. The representative sample consists of the twenty listed Sri Lankan food, beverage and tobacco companies based on their overall market capitalization. Consequently, ten companies with the highest market capitalization and ten companies with the lowest market capitalization. Firm size, liquidity and leverage were considered as firm-specific factors and interest rate, inflation rate and GDP growth rate were considered as macroeconomic factors. In contrast, the return on assets ratio (ROA) was used to measure the financial performance. Using a quantitative approach, this study collected secondary data from the annual reports of the selected companies from 2014 to 2023. A series of random-effects panel regression model was used to evaluate the hypotheses. STATA software was then used to analyze the data. Findings: The findings showed that firm size and liquidity positively influenced the financial performance of food, beverage and tobacco companies exhibiting the highest level of significance at 1%. The inflation rate is statistically significant at the 5% level, while the GDP growth rate demonstrates significance at the 10% level positively with ROA. However, leverage and interest rate do not emerge as a significant factor and negatively affect for the financial performance of food, beverage and tobacco companies in Sri Lanka. In conclusion, this study revealed that firm characteristics and macroeconomic factors significantly impact the financial performance of food, beverage and tobacco industry in Sri Lanka. Conclusion: This research offers crucial insights for policymakers, investors, and management teams in Sri Lankan food, beverage, and tobacco companies. The findings provide strategic guidance for improving financial performance, particularly for food, beverage and tobacco companies operating in similar macroeconomic conditions, supporting informed decision-making and fostering industry growth.Item The Impact of firm specific and macroeconomic factors on financial performance: Evidence from listed material companies in Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Shashini, K. L. A.; Tennekoon, S. T. M. S.Introduction: The material sector consists of a range of industries such as manufacturing and distribution of raw materials and finished products for infrastructure development and construction. And material companies contribute significantly to the country's GDP. In this study aim to investigate firm specific and macroeconomic factors on financial performance, based on the listed material companies in Sri Lanka. Methodology: The independent variables in this study include firm-specific factors such as firm size, leverage, and liquidity, as well as macroeconomic factors such as the inflation rate, interest rate, and GDP growth rate, while the dependent variable is financial performance. There are 18 material companies listed on CSE. The total population as a sample. The panel data regression analysis was employed for analysis purposes and using the STATA software. Findings: According to the results Firm size, Leverage and inflation rate have significant impact on financial performance of listed material companies in Sri Lanka, while liquidity, Interest rate and GDP growth rate do not have significant impact on financial performance of listed material companies in Sri Lanka. Conclusion: The analyses indicate that firm size and inflation rate positively and significantly affect financial performance, suggesting that larger firms and periods of inflation positively influence ROA. Conversely, leverage has a significant negative impact on ROA, indicating that higher debt levels reduce profitability.Item The Impact of Asset Liability Management on Financial Performance Before and During the Crisis: Evidence from Licensed Finance Companies in Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Fernando, W. H. J. T.; Gunasekara, A. L.Introduction: This study critically assesses the impact of ALM on the financial performance of licensed finance companies in Sri Lanka, focusing on pre-economic crises and during the crisis periods. This research integrates measures of financial performance, which include ROE and ROA, while using capital adequacy ratio, CAR; non-performing loans ratio, NPLR; operational efficiency ratio, OER; earning diversification ratio, EDR; and liquid asset ratio and LAR, as main ALM variables to provide holistic understanding in the role of ALM in navigating through financial instability. Whereas firm size is a control variable, COVID-19 pandemic, economic crisis, and combined crises are dummy variables created to capture the temporal and contextual variations. Methodology: The research conducted on panel data collected from 22 licensed finance companies over the period from 2016 to 2023. Using a quantitative research approach, secondary data was obtained from the annual reports of the selected companies. This study applies panel regression, including random effects and robust error adjustments. Findings: The results have proved that ALM significantly impacts financial performance, with positive effects of CAR on profitability and negative pulls from both NPLR and OER, especially at more heightened levels of economic stress. Earnings diversification and liquidity were found to moderate these effects. The findings also depicted differentiated impacts of crises and the way COVID-19 heightens the challenge of deterioration in asset quality and inefficient operations. Conclusion: The study underlines that ALM is important for treading economic turmoil and for achieving the highest level of financial stability. Effective ALM strategies improve resilience, thus allowing finance companies to maintain stability and stakeholder trust during crises. This paper provides useful insights for both policymakers and practitioners on how strategic improvements in the ALM framework should be undertaken to help attain financial sustainability in volatile markets.Item The Firm’s Specific Factors Affecting the Financial Performance of General Insurance Companies in Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Kavinya, W. A. D. E.; Sudasinghe, S. L.Introduction: The financial performance of general insurance companies is influenced by various firm-specific factors, including premium income, claim costs, underwriting results, and financial leverage. These factors are crucial in determining the profitability and overall financial health of insurance firms. This study aims to empirically test the impact of these firm-specific factors on the financial performance of general insurance companies in Sri Lanka. Methodology: This study on the impact of premium income, claim cost, underwriting results, and financial leverage on the financial performance of general insurance companies in Sri Lanka outlines the approach used to analyze these factors. The study uses a quantitative approach, relying on secondary data from the financial reports of 10 selected general insurance companies in Sri Lanka. Key variables, including premium income, claim costs, underwriting results, and financial leverage (debt-to-equity ratio), are measured and analyzed using statistical tools such as regression analysis to assess their effect on financial performance. Financial performance is measured using Return on Assets (ROA) as a dependent variable. Data analysis is performed using Random-effects panel regression models. The sample includes both publicly listed and private insurance companies, and the analysis focuses on data over a defined period. Findings: The results of the study revealed that premium income and underwriting results have a significant positive impact on ROA, suggesting that higher premium income and better underwriting practices enhance financial performance. Conversely, higher claim costs and increased financial leverage are found to have a negative effect on profitability, reducing ROA. These findings emphasize the importance of managing underwriting practices and claim costs, while also controlling financial leverage to improve overall financial performance. Conclusion: The study underscores the significant role that premium income, claim costs, underwriting results, and financial leverage play in shaping the financial performance of general insurance companies in Sri Lanka. To enhance profitability and solvency, insurance firms should focus on increasing premium income, optimizing underwriting results, and managing claim costs and financial leverage effectively. These insights provide valuable guidance for investors, management, and policymakers aiming to improve the financial health of the Sri Lankan insurance industry.