ICBI 2015
Permanent URI for this collectionhttp://repository.kln.ac.lk/handle/123456789/10527
Browse
2 results
Search Results
Item Impact of Working Capital Management on Financial Performance: Evidence from Plantation Sector Companies in Sri Lanka(Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Jeyanthini, S.; Rubika, M.Working capital management (WCM) is an integral part of financial management and management of working capital may have a significant impact on the profitability. This study explores the effect of working capital management on financial performance in Sri Lanka covering the period of 2009-2014, based on a sample drawn from the listed plantation companies. The sample comprises of 15 plantation companies listed on the Colombo stock exchange (CSE). In order to examine the effects of WCM on financial performance, the ROA and ROE were used as measures for financial performance while cash conversion cycle, current assets to total assets and current liabilities to total assets were used as measure of working capital management. Data of the selected firms which are listed in the CSE were obtained from their websites. Pearson’s correlation and regression analysis are used in drawing empirical evidence to answer the research questions of the study. The results depict that there is a significant and negative association between CCC and financial performance, measured by ROE (P = -0.041, < 0.05) and ROA (P= -0.048, < 0.05). Which indicate that, as the cash conversion cycle increases it would tend to reduce the financial performance of the company. The results derived from this research signify that the might able to raise their profits by diminishing the time period for the debtors and inventories so that, time period for payables would increase.Item The Impact of Working Capital Management on Profitability: Expolanka Case Study(Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Ismail, I.; Bandara, R.M.S.Commercial Organizations operate with the motive of improving shareholder wealth. Organizations are expected to manage their long term and short term financial resources to achieve the objective of shareholder profit maximization which is in line with maximization of wealth. In the backdrop of competitive landscape and scarcity of financial resources, the effective and efficient management of working capital is of paramount importance. This leads to companies giving priority in managing their working capital. The purpose of this study is to examine the Impact of Working Capital Management (WCM) on Profitability. To unearth answers for this question, 183 firm year observations covering 4 industry segments of Expolanka subsidiaries were investigated. The study covered five financial years from 2009 to 2014. Days sales outstanding, days payables outstanding, days inventory outstanding and cash conversions cycle were used as independent variables to measure WCM while gross profit margin, net profit margin, return on total assets and return on total equity were used as dependent variables to measure profitability. Pearson’s correlation analysis and regression analysis was used to analyst the relationship between these variables. According to results, it was evidenced that there is statistically significant positive relationship between Days sales outstanding and the Gross profit and Net Profit in Expolanka subsidiaries. Further there is statistically significant positive relationship between days payable outstanding and gross profit. Inventory days outstanding with gross profit has recorded statistically significant positive relationship. Cash conversion cycle has recorded significantly negative relationship with Gross profit and Net profit. Accordingly it was evidenced that shorter cash conversion cycle increases the profitability in Expolanka subsidiaries.