Commerce and Management

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    Impact of Working Capital on the Liquidity and Profitability of the Listed Hotels and Travels Sector Companies of Colombo Stock Exchange in Sri Lanka.
    (8th International Conference on Business & Information ICBI – 2017, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2017) Haleem, H. M. M.; Aswer, A.A.
    This study focuses on the impact of working capital on the liquidity and profitability of the listed Hotels and Travels sector companies of Colombo stock exchange in Sri Lanka. In the case of competition among the business due to the globalization and rapid growth nature the working capital becomes vital important to operate the day to day function of the business and also working capital management is an important component of management of corporate finance since it directly influences firm’s profitability as well as liquidity in everyday activities. The purpose of this research is to contribute towards a very important aspects of Financial management known as working capital management with reference to Sri Lanka here the impact of working capital on the liquidity and profitability of listed hotel & travel sector in Colombo stock exchange for a period of five years from 2012-2016.20 hotels and travels sector companies listed in the CSE for a period of 5 years from the 2012 to 2016 including the total of 100 observations. As per the objectives the regression analysis has been performed which shows there is no significant impact of working capital on liquidity but it has a significant impact on profitability of hotels and travels sectors companies. Also the selected hotels and travels sectors’ firms are showing the negative relationship with the profitability therefore the firms in order to increase the profitability.
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    The Relationship between Working Capital Management and Firms’ Performance: A Comparative Study between Manufacturing and Plantation Companies Listed in Colombo Stock Exchange (CSE)
    (Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Athapaththu, A.M.D.K.; Karunarathne, W.V.A.D.
    In this study an attempt has been made to identify the relationship between working capital and firms’ performance in listed manufacturing and plantation companies in the CSE and also to test the performance differences between two industries. Cash Conversion Cycle (CCC) is used to measure the working capital as it represents the main aspects of working capital. Payable and receivables and Return on Capital Employed (ROCE) were used as the measure for the firms’ performance. The study is primarily based on the secondary data that were extracted from the annual reports of 22 Manufacturing firms and 18 plantation firms listed in the CSE for the period from 2009 to 2012. The result of the normality test reveals that both the selected samples for ROCE is not normally distributed. Hence non-parametric tests were used to analyze data and it was found that both CCC and ROCE significantly vary from manufacturing firms and plantation firms. Statistical analysis was used to compare the performances between two industries. The results of the study depicted that the performance of plantation firms are lower compared to manufacturing firms and plantation firms operate lower cash conversion cycle compared to manufacturing sector. Spearmen’s Rank correlation coefficient is used to evaluate the relationship between CCC and ROCE. The results revealed that there is a moderate negative relationship between CCC and firms’ performance in manufacturing companies and also it is statistically significant. However, statistical evidence was not sufficient to prove the same for plantation companies. As a recommendation it is suggested that for all manufacturing companies to have a greater focus on working capital management which in-turn contribute to its performance. The industry factors and the opinions of the subject experts were also suggested the same. The study opens up further room for researchers to investigate into plantation industry -working capital with reference to different stages in the plantation life cycle.
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    Relationship between working capital management and firm’s profit
    (Department of Accountancy, University of Kelaniya, 2015) Patabendige, A.P.D.M.
    Working capital is a company’s surplus of current assets over current liabilities, which measures the extent to it can finance any increase in turnover from other fund sources (Hill, 2013). Working capital management is a managerial accounting strategy focusing on maintaining efficient levels of both components of working capital, current assets and current liabilities, in respect to each other. Working capital management ensures a company has sufficient cash flow in order to meet its short-term debt obligations and operating expenses. Many firms of Sri Lanka are facing many problems due to not having proper working capital management system. This paper reaches for to find the relationship between working capital management and firm’s profit of manufacturing companies. A sample of 10 Sri Lanka firms listed on Colombo Stock Exchange for a period of 5 years from 2010 to 2014 was selected. Objectives of this research is to identify main component in current assets and current liability in manufacturing firms, to evaluate working capital management methods in different companies, to identify the relationship between working capital management and firm’s profit. Collect data from annual reports of companies and visiting web pages of selected companies. Data is evaluated by using simple regression analysis and correlation analysis. Final conclusion of this research is to identify whether there is any relationship between working capital management and firm’s profit and which kind of relationship.