9th Students' Research Symposium 2020

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The Impact of the Performance of Life Insurance Companies on the Growth of Sri Lankan Economy
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Rajapaksha, R. A. D. N.; Gunasekera, A. L.
Introduction - Insurance service and sector is playing a major and important role in an economy and provide significant contribution to the economy through encouraging long term investments, reinvestments of additional funds in public and private sector securities such as corporate and government bonds and debt securities Design/Methodology - The population of the research comprises of all the life insurance companies in Sri Lanka. The collected data has analysed using panel data analysis model combined of cross-sectional data and time series data. Findings - The results of the study have revealed that among three factors that was studied, Penetration rate of insurance industry influences greatly on the economic growth of Sri Lanka while Gross Written Premium and Total Assets of insurance companies are not significantly influence on economic growth. Conclusion - There are more factors effect on life insurance companies; political factors; insurance advisor’s behaviour that may differ in diverse extents. Hence, future researchers can be used more factors and identify relationship among those factors and economic growth of Sri Lanka
The Impact of Intellectual Capital on Firm’s Financial Performance: Special Reference to Listed Banks, Diversified Finance and Insurance Companies in CSE
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Wijewardana, D. J. M.; Perera, L. A. S.
This research study has been carried out to determine the impact of the Intellectual capital on the firm’s financial performance in the listed banks, diversified finance and insurance companies of the Sri Lanka. This study aims to fill the gap of studying the above-mentioned sub sections listed in Colombo Stock Exchange. This study used VAICTM method to determine firms’ intellectual capital, using Human Capital Efficiency (HCE), Structural Capital Efficiency (SCE) and Capital Employed Efficiency (CEE) as Independent Variables and Return on Equity (ROE) as Dependent variable. The research has adopted non- probability sampling method and selected 12 banks, 20 Diversified Finance Companies and 8 Insurance companies as the sample. Also, random effects regression method has initially used to analyse the collected data. Stata package version 16 was used to run the tests and the regression of the model. Based on the analysed results, Banking Sector VAICTM and ROE has a negative relationship and CEE has positive significant impact on ROE. Diversified Finance sector VAICTM has a positive relationship with ROE and HCE, SCE, CEE has a positive impact on ROE. Insurance sector VAICTM has a positive insignificant relationship. The final result emphasizes that the overall models are statistically significant, and researcher conclude that there is a significant positive impact of CEE on Financial performance of Banking Sector and there is a significant positive relationship of VAICTM components and financial performance of Diversified Finance sector.
Relationship Between Macro Economics Variables and Stock Market Performance: with Special Reference to Colombo Stock
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Bandara, R. M. K.; Weerasinghe, W. D. J. D.
There has been an extensive debate on the relationship between economic variables and stock market performance especially in the context of emerging markets. However, there is mix results obtained multiple times. The primary objective of this study is to examine the impact of macroeconomic variables on stock market performance with special reference to the Colombo Stock Exchange. This research is based on secondary data. Exchange rate, Balance of Trade, Money Supply, and Inflation rate are categorized into macro-economic variables as independent variables and both ASPI and S&P SL20 index return are considered as dependent variables. Descriptive Statistics, Correlation Analysis, Multiple Linear Regression are the analysis tools used for data analysis. All macroeconomic variables show a week negative correlation with both ASPI and S&P SL20 returns. During the sample period, all variables indicate low volatility relating to correlation of variation and all independent variables show insignificant relationships other than the balance of trade with ASPI. Only M2b shows the insignificant relationship with S&P SL20 whilst other independent variables were significant with S&P SL 20 based on the analysis. It is understood that most of the macro economic variables affect the changes in the stock market’s performance. At the same time, it is suggested to direction of the relationship between macroeconomic variables and stock market performance as the further research areas.
Impact of Commodity Prices and Macroeconomic Variables on Stock Market Performance - Evidence from Sri Lanka
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Madhushankha, H. K. S.; Weerasinghe, W. D. J. D.
In Sri Lanka, the stock market performance is impacted by numerous variables. Out of these variables, this research study has been carried out to determine the impact of commodity prices and macroeconomic variables on stock market performance in Sri Lanka. This study incorporated two models by using stock prices generated through ASPI and S&P SL20 index as dependent variables. As the commodity variables, tea, coconut, rubber, gold, silver, aluminium and crude oil were used whilst as macroeconomic variables, real GDP, inflation rate and exchange rate were used. Aforesaid variables are used as independent variables. Vector Error Correction Model is used as the main analysis along with descriptive analysis, correlation analysis along with related tests. The results emphasize that commodity prices of tea, rubber, coconut, gold, silver, aluminium and crude oil have insignificant long run relationship with ASPI and S&P SL 20 & Tea and Rubber prices have a short run impact towards ASPI while only rubber prices impacted to S&P SL20 in short run. Macroeconomic variables of real GDP, exchange rate and inflation rate have insignificant long run relationship with ASPI and S&P SL20 and Exchange rate has a short run impact to both ASPI and S&P SL20 index. It is concluded that there is no relationship between the commodity prices and stock market performance except for tea and rubber prices. Meanwhile, real GDP, exchange rate and inflation rate have an impact on stock market performance.
The Impact of Internal Factors on Financial Performance of Life Insurance Companies in Sri Lanka
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Uduwana, G. W.; Basnayake, W. B. M. D.
Introduction- The performance of the company plays a leading role towards the growth of the industry which ultimately leads to the overall success of the economy. Therefore, Organizational performance has attracted scholarly attention in corporate finance literature over the several decades. Nevertheless, a little attention has been paid for such when it comes to the insurance sector. Thus, the present study attempts to identify the factors determining the profitability of insurance companies operating in Sri Lanka by taking return on asset as dependent variable. Design/methodology/approach -The sample for this study includes the 10 Life insurance companies in Sri Lanka and it used the data pertaining to five financial years from year 2015. For the purpose of analysing the data, descriptive analysis, correlation analysis and regression analysis were conducted with the aim of testing hypotheses formulated for this research. Therefore, internal factors such as Age of the firm, Size, Liquidity, and leverage were regressed against Return on Assets. Findings-This study led to the conclusion that profitability of insurance companies in Sri Lanka is positively and significantly influenced by liquidity and Leverage while age and Size of the firm have an insignificant effect on the performance of Life insurers in Sri Lanka. Conclusion- Finally, the research recommends life insurance companies in Sri Lanka to perform better in terms of their return on assets where, they need to improve the leverages and liquidity to a certain level based on the results of the study.
Assessing Financial Literacy Among Undergraduates of University of Kelaniya
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Samarasekara, M. A. G. I.; Abeysekera, R.
The purpose of this article is to analyse the level of financial literacy among university students at the University of Kelaniya. The study focuses on how demographic factors such as age, gender, faculty, year of study and income level affect undergraduates' financial literacy levels and whether there is a correlation between financial knowledge and demographic factors. To achieve the research objectives, the researcher collected data from 400 university students representing all faculties and years. This research used a stratified random sampling technique. Questionnaires were used as the primary sources of data collection methodology in this study. Descriptive Statistics, independent sample T-Test, ANOVA test and Probit regression were used for data analysis, and SPSS software was used as statistical software to analyse the survey data. The overall mean percentage of a correct score for the survey is 60.29%, indicating that the level of financial literacy of students at the University of Kelaniya is medium. The hypotheses test revealed that three factors, including gender, faculty, and income level, significantly affect the financial literacy level. According to the findings of the ANOVA test, there is a significant difference between financial literacy and age, gender, faculty and income level. Further, there is no significant difference between the financial literacy and the year of the respondent. This study fills the current research gap in financial literacy. The findings demonstrate the need for financial literacy education. Mainly researcher has concluded the level of financial literacy of students at the University of Kelaniya is moderate. Finally, the researcher recommends some recommendation to increase the level of financial literacy of undergraduates and recommends future researchers to overcome existing limitations and expand these studies to a variety of areas.
Impact of Loan Portfolio Diversification on Performance of Commercial Banks in Sri Lanka
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Samarasinghe, R. D. A. D.; Weerasinghe, W. D. J. D.
Introduction - Credit risk related to commercial bank loans can be considered as one of the main risks faced by commercial banks. Therefore, commercial banks diversify their loan portfolio to improve performance and mitigate credit risk. Loan portfolio diversification refers to lending to different sectors without concentrating on a particular sector. The purpose of this study is to examine the impact of loan portfolio diversification on the performance of commercial banks in Sri Lanka. Design/Methodology/Approach - Hirschman Herfindahl Index was used to measure the loan portfolio diversification and performance measured based on CAMEL model. Interest Rate Spread and Bank size considered as the control variables. Data were collected from audited annual financial statements of commercial banks for a 5- year period. Data were analysed by using correlation and fixed effect panel regression model. Findings - The results reveal that there is a significant positive impact of loan portfolio diversification on commercial bank performance. Further, control variables bank size positively not significant links with commercial bank performance while interest rate spread has a negatively not significant impact on bank performance. Conclusion - It is confirmed that a diversified loan portfolio position leads to the healthy performance of commercial banks. The management should follow specific strategies about loan portfolio diversification and improve commercial bank performance while making high attention about the loan portfolio position of the bank.
Impact of Loan Portfolio Diversification on Performance of Licensed Commercial Banks in Sri Lanka
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Rathnamalala, R. I. B. A. M. I.; Perera, L. A. S.
Introduction: The empirical studies provide mixed evidence on the relationship between loan portfolio diversification and loan portfolio concentration with the bank performance. This research study is one of the research that has been carried out for the Sri Lankan context with the main objective of, determine the impact of loan portfolio diversification on performance of licensed commercial banks in Sri Lanka. Design/ Methodology/ Approach: Non probability sampling technique is used to select 10 banks out of 26 licensed commercial bank in Sri Lanka for the period of 2010 to 2019. Data were analysed by using correlation and fixed effect panel regression model. The independent variables of product wise diversification and sector wise diversification calculated from the measurement of Hirschman Herfindahl Index. Return on asset has taken to measure the bank performance and Interest Rate Spread, Capital Adequacy, Liquidity and Bank Size are used as control variables for identifying the model. Findings: There is a significant negative impact on product wise loan diversification on bank performance and significant positive impact on sector wise loan diversification on bank performance. Further, control variables of interest rate spread and bank size have a significant negative relationship with bank performance while Capital Adequacy has a significant positive relationship with bank performances. Conclusion: According to the product wise loan diversification bank can earn more profit from concentration strategy while under the sector wise loan diversification bank performance can be improved by following diversify strategy.
Impact of Electronic Banking on Operational Performance of Commercial Banks in Sri Lanka
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Prabodhi, W. A. D.; Buddhika, H. J. R.
Introduction- Information and Communication Technology (ICT) is essential for financial markets for faced and sustain the competition. However, a limited number of studies have been conducted in Sri Lanka to determine the impact of e-banking on banks' profitability in Sri Lanka. This study critically investigated the effect of e- banking on operational performance in Sri Lanka. Design/Methodology/Approach- The secondary data gathered during the year 2014 to 2019 concerning fee and commission income on internet banking, number of branches, number of ATMs, from the published annual reports of ten selected banks systematically. Regression analysis processed to determine the effects of electronic banking on profitability. The descriptive statistics, Pearson correlation were used for the data analysis through E-Views 11 statistical software. Findings – Based on the results, the fixed-effect model found a significant positive relationship among IB (Internet Banking) on ROA, negative significant with ROA and BN (Branch Netwok), ATMs. Also, the insignificant relationship between ROE and IB. CIT (Cost to Income ration) and IB have negative significant, and other variables are a significant relationship with CIT. Conclusion: Results proved that; e-banking has significantly contributed to the banks' operational performance in Sri Lanka.
Impact of The Fintech on Profitability of Commercial Banks in Sri Lanka
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Dilshan, T. D. N.; Basnayake, W. B. M. D.
Introduction - In today’s rapidly growing world, banks are having an increased rate of competition from other nonfinancial institutions that are providing e-commerce services and financial services to their customers. This research study tries to fill the gap of the limited previous studies that investigate according to existing research studies conducted by various researches related to impact of FinTech on the profitability of the banks. Design/Methodology/Approach - This study incorporated with Bank profitability through the impact of Financial Technology (FinTech). Purposive Random sampling method was used in choosing the sample. The research has adopted a descriptive research method and the study selected 10 listed commercial banks during the period of 2010 to 2019. Also panel least square (PLS) regression method has initially used to analyse the collected data. Findings - Based on the analysed results, every variable contains stationarity and analysis has followed a fixed effect model and it includes Investment in IT which is positively significant towards bank profitability whereas total assets is negatively significant. Use of a mobile app and Introduction of an online payment gateway shows positive and negative insignificant relationships respectively. Conclusion - The final result emphasizes that the overall model is statistically significant, and researcher conclude uptake of Fintech and Profitability of Commercial Banks in Sri Lanka have a significant relationship with bank profitability.
Factors Influencing Life Insurance Consumption in Western Province, Sri Lanka
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Jayawardana, M. M. H.; Weerasinghe, W. D. J. D.
Introduction – Insurance service play a major role in the business society. Whilst life insurance companies play a major role in the insurance market in Sri Lanka. Therefore, it is important to determine the factors influencing life insurance consumption in Sri Lanka. The main objective of this research is to study, determine the factors that influence life insurance consumption in Western province, Sri Lanka. Sub objectives are the find out the relationship between income, level of education, age, gender & no of dependent with life insurance consumption. Design/Methodology/Approach - A Survey was conducted for data collection through a structured questionnaire distributed to 203 life insurance policy holders from the western province Sri Lanka. The study follows the convenient sampling method to collect data. The analysis used in the study are descriptive analysis, correlation analysis, multiple regression analysis based on the hypotheses testing. Findings - The study found strong positive relationship of No of dependence with life insurance consumption. Conclusion - The study found strong positive relationship of No of dependence with life insurance consumption
The Impact of Credit Risk on Bank Profitability: Evidence from Licensed Commercial Banks in Sri Lanka
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Sumanathilake, D. M.; Weligamage, S. S.
Introduction - Lending is one of the main incomes generating activity in commercial banks. Credit risk occurs in connection with lending. Among the different risks facing by banks risks, credit risk is considered as one of the major determinants of bank profitability because of the number and diversity of stakeholders affected. Design/Methodology/Approach - The objective of the study is to assess the impact of credit risk on profitability of licensed commercial banks in Sri Lanka for the period 2015 to 2019. Thirteen commercial banks were selected for the study and data was collected through published annual reports and using Eviews Statistic Software was performed Descriptive analysis, Correlation and Regression analysis. Findings - This study found that non-performing loan (NPL) ratio has a insignificant negative impact on Return on Assets (ROA) ratio, while total loan to total deposit (TLTD) ratio has significant negative impact on Return on Assets (ROA) ratio. Furthermore, non-performing loan (NPL) ratio has significant negative impact on Return on Equity (ROE) ratio, while total loan to total deposit (TLTD) ratio has insignificant negative impact on Return on Equity (ROE) ratio. Conclusion -Findings of this study contribute to formulate efficient and effective credit risk management control policies for licensed commercial banks in Sri Lanka.
Determinants of Non-Performing Loans in Sri Lankan Commercial Banks
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Rajaguru, R.B.B.S.; Gunasekera, A. L.
Introduction- Non-performing loans (NPLs) is considered major issue of the banking sector in any economy. Sri Lankan context non- performing loan is also a major risk of the financial sector. This study aims to examine the effect of bank specific determinants, corporate governance determinants and bank specific determinants on the non- performing loans of listed bank in Sri Lanka for the period of 2010 to 2019. Design/ Methodology/ Approach- This study is used ten listed licensed commercial banks in Sri Lanka as a sample. This study mainly has used secondary data collection methods. The study has considered bank size, loan growth rate, loan loss provision to gross loan, operating expenses to income ratio, gross domestic product growth, lending rate, inflation rate, gender diversity, board independence. The panel data regression method has been used to estimate the impact. Findings- The study finds that independent variable which are used in this research namely, loan growth rate, loan loss provision to gross loan, operating expenses to income ratio, lending ratio and gender diversity has significant influence on non- performing loans in Sri Lankan banking sector. Also finds that bank size, GDP growth rate, inflation rate and board independence has no significant influence on the non-performing loan level. Conclusion- The study Fulfils the existing research gap in the area of determinants of NPLs in Sri Lankan Banking Industry. These findings will help for future studies relating to Determinants of NPLs on NPL level.
Macroeconomic Stress Testing and The Resilience Assessment of the Banking Sector in Sri Lanka
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Ekanayake, E. M. D. N. B. E. M. D. N. B.; Fernando, J. M. R.
Introduction - Financial stability and Macroeconomic stress testing of the banking system turned out to be an increasingly important objective in economic policymaking in the global context as well as in Sri Lanka. Although macroeconomic stress testing at the level of individual banks has been widely applied, macroeconomic stress testing at the level of entire financial systems is a more recent instrument. The study conducts a stress test to assess the banking sector vulnerabilities in Sri Lanka to the most extreme but plausible macroeconomic shocks. Methodology - The model attempt to account for the dynamics between banks' asset quality and key macroeconomic variables through conditioning the stress test based on the historical correlation between the variables and allowing for feedback effects from credit risk to the macro economy. Further, it uses historical and hypothetical stress scenarios to capture the most extreme but plausible key macroeconomic impulses on financial soundness indicators to evaluate the banking sector vulnerabilities. Findings - Results indicate a cointegration relationship between credit quality and key macroeconomic variables. The expansionary monetary policy positively and significantly affects credit quality and capital adequacy through economic growth. Conclusion – Study concludes that the Sri Lankan banking sector is not substantially vulnerable to and hence not threatened by various significant adverse shocks considered in the analysis domestically and externally via stressed GDP growth rate as per current BASEL norms. Even if the most extreme economic stress conditions witnessed over the past two decades were repeated, the Sri Lankan banking sector should remain robust in terms of tier 1 and tier 2 capital requirements.
A Study on Influencing Factors on Consumer Purchase Decision for a Leasing Product (With Special Reference to HNB Finance Ltd)
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Erandi, W. A. S.; Ranjani, R. P. C.
The leasing industry is growing so high with competitions and the market growth of the finance industry in dividing for lots of companies. The current study conducted to address the leasing product in HNB Finance Ltd., because it is the one of competitive industry which all the competitors are always create an individual succeeded and unsuckered. Due to the service failures occurred in leasing product in HNB finance, it faces issues in their business. The primary objective of this research is to find out the factors affecting to consumer purchase decision in Leasing product of HNB Finance Ltd. Researcher developed a conceptual framework based on literature and identified Brand Awareness, Product Features, Service Quality, Customer Relationship Management, and Convenience as influencing factors. Researcher collected data through a questionnaire of selected 100 samples from Western Province and analyzed the data by using SPSS tool. Through SPSS researcher done Descriptive analysis, Regression Analysis, Correlation Analysis and ANOVA. Based on the analysis, Product features, Customer relationship management and Convenience have a significant positive relationship with consumer purchase decision while brand awareness and service quality have negative impact on consumer purchase decision. Finally, researcher given recommendations according to the conclusions gathered to make new strategies and overcome the current problem in the product. Based on findings recommendations have made in order to utilize resources on accepted variables to enhance effectiveness.
Impact of Financial Literacy on Retirement Planning of the Private Sector Employees in Colombo District
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Yushan, M. M. M. P. Y.; Fernando, P. N. D.
Individuals set of knowledge and skill to take effective decisions to go through with their financial resources known as Financial Literacy. Individuals should have their own financial literacy knowledge when they are planning to retire. So, this research identifies the practice of financial literacy on retirement planning of the private sector employees in Colombo district. The data collection was conducted through a standardized questionnaire distributed to private sector employees in the Colombo district. The study follows the stratified random sampling method to collect data, and 150 sample was collected. Descriptive Statistics, Cronbach's alpha, Regression analysis, and Pearson Correlation were used for data analysis. It was found that there was a significant impact on financial instruments and computation capability on retirement planning although knowledge of financial concepts may not have impact on retirement planning. Therefore, following theories were approved, although one of the three hypotheses in the analysis was refused. The study fulfills the existing research gap in the area of Financial Literacy levels of the private sector employees in Colombo district, Sri Lanka. These findings will help for future studies relating to Financial Literacy levels of other districts in Sri Lanka.
Determinants of Non-Performing Loans in Licensed Commercial Banks in Sri Lanka
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Gajasingha, G.M.N.T.; Herath, H. M. N. P.
Introduction - The purpose of this paper is to examine the determinants of non- performing loans in licensed commercial banks in Sri Lanka. In recent years, non- performing loans have been a huge issue for the financial industry. Non-performing loans in the Sri Lankan banking system have grown exponentially over the last few years. Design/methodology/approach - The research sample consists of 10 domestic licensed commercial banks, based on annual data representing the period 2010-2019, including 100 observations, which shall be taken into consideration. Findings - Average Prime Lending Rate, GDP Growth rate, Lone to Deposit ratio and Bank size have a positive relationship with NPL and Inflation rate, Loan Growth for the bank, ROA and Loan Loss Provision have a negative relationship with NPL. Conclusion – Regression findings showed that Six independent variables are statistically significant among both bank-specific and macro-economic variables. Throughout the considered period, public commercial banks maintained better credit quality than private commercial banks that operate in the country. To preserve the banking sector's stability, commercial banks need to continue strengthening their credit risk mitigation measures.
The Nexus Between Economic Growth, Foreign Direct Investment and Environmental Pollution in Sri Lanka
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Dananjaya, A. D. T.; Fernando, J. M. R.
Globalization, liberalization and the exchange of capital flows are the most significant features in modern economics that have played a vital role in almost every economy. In the recent past, the world heavily moves onto several manufacturing industries with highly pollution intensive. Thus, the aim of the study is to examine the nexus between economic growth, foreign direct investments and environment pollution in Sri Lanka. Therefore, the study focuses on the bidirectional and multidirectional nexus between these three variables over a long-time horizon. The sample is based on Sri Lanka covering the period from year 1978 to 2019. Data was collected through secondary data sources, such as United Nations Conference on Trade and Development and the world development indicators. The data was tested using time series ARDL regression model. Foreign Direct Investments and Gross Domestic Production has a significant impact towards each other’s, while, Gross Domestic Production and Carbon Dioxide and Foreign Direct Investment does not have a significant impact. Form the Bound test it was proven that Gross Domestic Production and Carbon Dioxide does not have a long term relationship indicating that there is no cointegration. The study revealed that in order to promote economic development, energy consumption should be carried out in a more thoughtful way. Environmental management is very important as a result of sustainable progress. The Sri Lankan authorities should take the requisite measures to resolve environmental problems and safeguard the environment, as environmental conservation does not in the long run, conflict with economic growth.
Critical Illnesses Coverage Pricing in Health Insurance Products
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Fernando, M.D.K.; Wijesinghe, M. R. P.
Introduction - Health insurance is a one of the major solution for the financial issues due to medical needs of peoples in various types. The health issues of the people are very deferent. Because some people have high risky health issues. The study focuses on type of critical illnesses affect in to the people and how to design a customer oriented coverage. Using these critical illnesses, the insurance companies are offer a coverage of “critical illness benefit coverage”. This study focus to describe how to pricing critical illness coverage premium. In that coverage usually include 40 types of critical illnesses in most of the insurance companies. It mainly depends on mortality risk and risk behaviour of the various type of critical illnesses in Sri Lanka. Design/methodology/approach - Mortality data collected by IMMR report (2004- 2018) of health ministry of Sri Lanka. All the data adjust from the population of Sri Lanka. After that made calculations and found the relationship among the variables. Insurance companies are usually providing critical illness coverage for all 40 illnesses. Findings – The study focus and practically implement to how to pricing customer oriented critical illness health coverage for the customer preference and opinion. As per the customer point of view, company had an opportunity to minimize to the customer extra payment for their non-essential coverage and they had an opportunity to design their needed coverage. Otherwise organization point of view, they had an opportunity to their product development for the need of customer. Conclusion - According to the finding and discussion finally researcher practically implement the objective of the study for the appropriate manner.
Impact of Financial Reporting Quality on Corporate Performance: Evidence from Companies Listed in Colombo Stock Exchange
(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Fernando, L.A.R.; Piyananda, S. D. P.
Financial reporting is one of the most important products of accounting system that tries to provide necessary information for users to make decisions on the evaluation of an economic enterprise's profitability and performance. Financial reporting quality can be defined as the faithfulness of the information generated by the financial reporting process. Quality of financial reporting can affect companies’ profitability, Liquidity, Efficiency, Stock prices and company performance. This study aims to examine the impact of financial reporting quality on corporate performance, using Real Earnings method. We can divide Company performance in two main categories called financial performance and Market performance. Financial performance measured by using Return on Assets (ROA) and Return on Equity (ROE) and Market performance measured by using Market Value (MV) and Tobin’s Q (TQ). Firm Size, Earnings per Share, Debt to Equity Ratio were used as control variables. For this research collect secondary data from the Annual reports (financial statements) of listed companies in the CSE for the period of 2012-2019. The findings of the study were that all the control variables have significant impact on financial performance and market performance. The study concluded further that insignificant relation existed between FRQ and firm performance. This study has concentrated on the importance of the quality of financial reporting on the performance of the organizations. The manufacturing industry needs to improve the quality of financial reporting. In order to make the investment opportunities attractive, the assurance of a trustworthy financial reporting can only be achieved if the internal control within the organizations is strong enough. Which will eventually avoid from any kind of misstatements and fraudulent financial reporting within an organization. Financial reporting is one of the most important products of accounting system that tries to provide necessary information for users to make decisions on the evaluation of an economic enterprise's profitability and performance. Financial reporting quality can be defined as the faithfulness of the information generated by the financial reporting process. Quality of financial reporting can affect companies’ profitability, Liquidity, Efficiency, Stock prices and company performance. This study aims to examine the impact of financial reporting quality on corporate performance, using Real Earnings method. We can divide Company performance in two main categories called financial performance and Market performance. Financial performance measured by using Return on Assets (ROA) and Return on Equity (ROE) and Market performance measured by using Market Value (MV) and Tobin’s Q (TQ). Firm Size, Earnings per Share, Debt to Equity Ratio were used as control variables. For this research collect secondary data from the Annual reports (financial statements) of listed companies in the CSE for the period of 2012-2019. The findings of the study were that all the control variables have significant impact on financial performance and market performance. The study concluded further that insignificant relation existed between FRQ and firm performance. This study has concentrated on the importance of the quality of financial reporting on the performance of the organizations. The manufacturing industry needs to improve the quality of financial reporting. In order to make the investment opportunities attractive, the assurance of a trustworthy financial reporting can only be achieved if the internal control within the organizations is strong enough. Which will eventually avoid from any kind of misstatements and fraudulent financial reporting within an organization.