Commerce and Management
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Item 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.Item The effects of working capital management on profitability, liquidity, solvency and organic growth with special reference to SMEs: A review.(International Journal of Accounting & Business Finance, 2017) Semasinghe, D.M.; Mahasena, Senanayake; Dayaratna Banda, O.G.A well designed and implemented working capital management is expected to contribute positively to the creation of a firm's value and ultimately to its organic growth extent. The purpose of this paper is to review the trends in working capital management and its impact on firms' performance and organic growth as experienced in previous studies. The theoretical underpinnings have also been evaluated and recorded as preliminary comments. The examination of literature has been categorized, so as to consider micro aspects of: definitions, nature, generics of working capital management and the key contributions of profitability, liquidity, solvency leading to organic growth. On a macro footing the impact of small and medium enterprise on national development in Sri Lanka and hence the need for a differentiated approach has been examined. A strong significant relationship between working capital management and profitability, liquidity, solvency and financial health has been found in previous empirical work. A case in point would be to determine by further research the extent of presence of these value drivers and determine the extent to which they champion, the cause of value enhancement amidst an increasing trend in the short-term component of working capital financing as reflected in their respective 'financial architectures'. Adoption of 'cutting edge' strategies and tactics in relation to working capital management practice seems to be a need for most SMEs in Sri Lanka.Item Impact of Global Financial Crisis on Banking Sector Performance in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Priyadarshani, K.M.C.; Thilakarathne, P.M.C.Financial crisis is a situation in which the supply of money is outpaced by the demand for money. This means liquidity is quickly evaporated because available money is withdrawn from banks. The purpose of this study is to investigate impacts of global financial crisis on banking sector performance in Sri Lanka. It is based on the two objectives which were to assess relationship between financial crisis and bank performance and to examine impacts of Capital Adequacy, Assets Quality, Management Quality, Earnings and Liquidity on bank performance. Data was collected through the annual reports of selected commercial banks from 2007 to 2015.A descriptive statistics, correlation analysis and multiple regression analysis were used to investigate relationship between Capital Adequacy Ratio, Gross Non Performing Advances Ratio, Interest Coverage Ratio, Return on Equity and Liquid Assets Ratio with the Bank performance. The findings indicate that Capital Adequacy Ratio, Gross Non Performing Advances Ratio, Interest Coverage Ratio, Return on Equity had a significant relationship with bank performance. But Liquid Assets Ratio had a no significant relationship with bank performance. Thus the study concludes that global financial crisis significantly influenced on the bank performance. Final outcome of this research is adding knowledge to bank entities to get an idea about how they can preserve their performance within crisis period.Item Impact of Competitive Ability on Financial Performance of Sri Lankan Banks(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Maduranga, B.I.C.; Aruppala, W.D.N.This research analyses the impact of competitive ability on financial performance of listed banks in Sri Lanka. Capital delivers a buffer against losses and thus it ensures safety and soundness of the financial institutions. It is initial requirement for any financial institution to maintain sufficient capital. Liquidity is a main concept that most of investors are not properly maintained and result of that financial plans could be fail to come through such critical time. Liquidity causes more financial issues than rest of factors. The study relied on secondary data and thus annual reports of the listed banks were used to acquiring data. Ratios were used to analyze the data and regression analysis was used to measure relationship of the variables. The main finding in the study is that capital adequacy and liquidity has contributes positively & negatively on financial performance of listed banks in Sri Lanka. The findings of this study is useful for make productive decisions on investing in Sri Lankan banks.Item Determinants of Profit Heterogeneity at Firm Level: Empirical Evidence from Sri Lankan Manufacturing Sector(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Madumadavee, W.A.J.The fundamental purpose of this study is to determine and investigate the importance of different factors that has an impact on profit heterogeneity at firm level specifically within the context of Sri Lankan Manufacturing sector. When it comes to the Sri Lankan manufacturing sector, it is gradually developing year-by-year and the contribution to GDP is considerable. Therefore, going with an investigation on it is essential since it helps certain parties to make better decisions. This study used multiple regression analysis for panel data of 12 listed firms over the period of 2010- 2014 to explain variation in firm profitability. Using return on assets as the dependent variable, it has developed a model to observe the impact of different independent variables on profit variation. Profitability has a moderate positive relationship with the identified firm-specific variables. This study demonstrates that the variables such as liquidity, age since listed and size of the firm are the dominant factors in explaining total variation in profitability and the liquidity and age adversely affecting it. While size is having an inverse relationship with profitability of manufacturing firms, growth, capital intensity and market share is having a negative insignificant impact on profitability. It is found that leverage is having a positive insignificant relationship with the profitability. The findings have strong policy implications for both the companies and the economic managers of Sri Lanka. The managers and the owners of the manufacturing sector firms operating in countries like Sri Lanka should consider both the capital structure and liquidity level to realize higher profitability. The research will support firms to develop better strategy than before. It also helps the manufacturing firms to better deal with competition it faces from the industry. This is probably the first study of its kind that tries to explain variation in firm profitability in Sri Lankan manufacturing sector.Item An Empirical Analysis of Liquidity in S&P SL 20 Index of Colombo Stock Exchange(University of Kelaniya, 2014) Fernando, C.S.P.K.; Chandrasena, S.M.; Perera, H.A.N.D.This study analyzed the liquidity formation in the recently introduced index to the CSE, the S&P SL 20. The main focus of the study was the depth of trading liquidity. Three possible influences on depth; timing, market condition and trading volume, were identified. Regression and correlation analyses were used to test developed assertions. First regression model tested the impact of time on share price. Second regression model tested the impact of time on share volume. Finally, the impact of share volumes on share price was tested with correlation analysis. A highly and continuously trading stock sample was drawn from the S&P SL 20 index as to test the variables at their ceiling liquidity. The results shows there were no material impact from any of the variables studied on trading liquidity of sample stocks.Item 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.