Commerce and Management

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    How Business Planning Affect on Financial Performance with regard to Sri Lankan Western Province Manufacturing SME’s
    (Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Chathurika, H.A.H.; Gunasekara, U.L.T.P.
    This paper reports the impact of business planning on key financial performance in Sri Lankan Small and Medium Enterprises. Business planning is a critical activity and it is differently considered as an essential tool to initiate and manage a business successfully. The study expected to examine the availability and nature of the business plan and its impact on key financial performances of the businesses were evaluated. Major performance indicators such as ROI, Profit Growth Rate, Asset Turnover Ratio, Payback Period and Current ratio were measured against business planning. The data were collected through primary sources and secondary sources including journals, research papers and a questionnaire. Eighty entrepreneurs have been selected as the sample. The sample represented the manufacturing SMEs in urban areas in the Western Province since most of the rural SME’s rarely practice Business Planning. The study explored that the comprehensiveness of the Business Planning is at average level denotation that they prepare moderately comprehensive Business Plans. Further the results suggested that there is a significant relationship between the nature of the business plan and the financial performance of the business.
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    DETERMINING WORKING CAPITAL SOLVENCY LEVEL AND ITS EFFECT ON PROFITABILITY IN SELECTED INDIAN MANUFACTURING FIRMS
    (2010) Singh, K.; Asress, F.C.
    A well designed and implemented working capital management has a significant contribution for firms? profitability as well as to maintain liquidity powers. The purpose of this study is to assess working capital adequacy and its impact on profitability; to investigate the relationship between profitability and liquidity of firms. Natural logarithm of total current liabilities and Relative Solvency Ratio (RSR) are taken as dependent variables to measure the required size of current liabilities and firm?s solvency level respectively. Independent variables are sales, return on assets, current ratio, and cash conversion cycles. These are included in the panel data regression to assess for 250 firms for the period of 10 years. The regression result indicated that sales and cash conversion cycle have highly positive significant effect to determine required current liabilities (short term debt) whereas return on assets and current ratio have highly negative significant effect to determine required current liabilities. The result of negative association between profitability and liquidity is statistically insignificant. With the help of student t-test, the study also revealed that firms with adequate working capital achieved better performance than those firms which have less working capital in related to their operational sizes. Therefore, the null hypothesis that there is no difference between firms which have adequate working capital and less working capital in relation to their operational size on profitability is rejected as the p value is less than 0.05.