Commerce and Management

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Subject: search.filters.subject.Profitability

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    Impact of Intellectual Capital on Profitability of Licensed Specialized Banks of Sri Lanka: Evidence from Sri Lanka
    (Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Jayasooriya, J. P. D. K.; Samarawickrama, A. J. P.
    Introduction: This study contributes to investigate the impact of intellectual capital (IC) on the profitability of six licensed specialized banks in Sri Lanka. Methodology: Human Capital Efficiency, Structural Capital Efficiency, Capital Employed Efficiency and Relational Capital Efficiency are the independent variables used in this study and ROA, ROE are the dependent variables. For empirical problems, this research addresses balanced panel data with 6 Licensed Specialized Bank of Sri Lanka from 2013 to 2022, based on data availability for the study. STATA will be used for data analysis through regression while testing my hypothesis. Findings: This analysis shows a significant positive relationship between MVAIC and profitability. Among the MVAIC components, there is a significant positive impact between HCE and profitability (ROA, ROE). However, this study shows that there is no significant impact on profitability with SCE and RCE. However, although CEE shows a significant positive impact on ROA, it is not significant on ROE. Conclusion: The result highlights that the overall model is statistically significant. According to the findings, the need to establish targeted strategies to improve IC, promote innovation, and profitability in the banking environment is evident.
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    Influence of Company-Specific Factors on Profitability in Life Insurance Companies in Sri Lanka
    (Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Wijesinghe, S. R. S.; Sudasinghe, S. L.
    Introduction: The purpose of this study is to look into how company-specific factors influence the profitability of Sri Lankan life insurance businesses. It specifically looks at the influence of company-specific factors such as premium income, claim costs, underwriting results, and risk-based capital on profitability. The life insurance market in Sri Lanka confronts considerable hurdles in maintaining profitability, which is critical to the industry's stability and expansion. Methodology: This study uses a quantitative research design using empirical methods built under a positivist paradigm and a deductive methodology. The study uses panel data from ten life insurance companies from 2016 to 2022, using financial data derived from annual reports and IRCSL reports. The research employs a panel data regression model to determine the influence of the stated factors on profitability. Findings: The investigation, which is supported by descriptive statistics, demonstrates substantial correlations between profitability and company-specific factors. Profitability is positively influenced by premium income and risk-based capital, but claim costs have a negative influence. However, underwriting results have little influence on profitability. Conclusion: The research gives critical insights into the financial dynamics of the life insurance industry, highlighting significant factors influencing profitability. It provides stakeholders with direction on how to improve premium income strategies, optimize claims management, and strengthen risk-based capital management in order to improve financial performance and strategic decision-making.
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    How does Altmann’s revised z-score model impact the insurance companies in Sri Lanka
    (Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2025) Shehara, J. M.; Buddhika, H. J. R.
    Introduction: The insurance industry is a major part of the country's economy. The revised Altman's z-score model measures financial distress among companies. Today, financial distress can be a huge problem that leads to company bankruptcy. Hence, this research tests the factors that may influence such financial distress among insurance companies incorporated in Sri Lanka using the revised Altman's z-score model. Methodology: This study collected data on insurance companies incorporated in Sri Lanka from 2016 to 2021. Distressed insurance companies are the sample measured using the Revised Altman's z-score model. Using quantitative approaches, this study collected data from annual reports and industry handbooks. Profitability (ROA), leverage, capital adequacy, and inflation rate are used as independent variables to reflect the impact of the revised Altman's z-score model on the Sri Lankan insurance industry. A random effect model was used in this study to analyze the data. Findings: The result of this study revealed that there is no significant impact of any of the independent variables on the dependent variable. Therefore, all the hypotheses are rejected. Conclusion: In line with the findings of this study, the impact of profitability, leverage, capital adequacy, and inflation rate is not significant. However, it is very important to conduct further research to find the determinants that may lead the insurance companies to financial distress, as there has been no research done on this issue, despite the existence of financial distress within the insurance companies incorporated in Sri Lanka.
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    How Does Firm Specific Risk Impact for the Firm Performance of Insurance Industry in Sri Lanka
    (Faculty of Commerce and Management Studies University of Kelaniya., 2024-11-01) Sooriyaarachchi, S.K.R.N.; Buddhika, H.J.R.
    Risks and uncertainties unique to the operations and functioning of insurance businesses are referred to as insurance-specific risks. Thus, using a sample size of 27 companies, the study examines how these insurance-specific risks affect profitability in Sri Lanka over an 11-year period (2012–2022). Insurance- specific risk for independent variables has been measured using three variables: reinsurance, technical provisions, and underwriting risks. Firm performance was assessed using the return on equity as the dependent variable. The Ex-Post Facto Research Design, on which the study is based, makes use of previously gathered data. Their yearly reports provided secondary data for the study. The fixed effect regression model's findings demonstrated that, whilst underwriting risk had a negative and negligible effect on return on equity, technical provision risk and reinsurance risk had a negative and significant influence. According to the study's findings, the insurance companies listed in Sri Lanka will become less profitable as reinsurance and technical provision risks rise. According to the study, insurance companies in Sri Lanka should adequately account for unpaid claims by evaluating their liabilities and considering their experience in order to create a thorough process for efficiently tracking and managing their unpaid claims. Additionally, Sri Lankan listed insurance companies will take into account their risk retention ratios and reinsurance policies. Listed insurance companies must also improve their capacity to pay the majority of claims on their own.
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    The Impact of Internal Control Systems on Profitability: A Study Based on Employees’ Perception of Licensed Commercial Banks in Sri Lanka
    (4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Jayaweera, W.T.N.; Karunarathna, W.V.A.D.
    Internal control system plays an important role in preventing and detecting fraud and also protecting the tangible and intangible assets of an organization. Therefore, it is important to study how the internal control system of an organization affects the organization’s performance. Indeed, it is critical for banks and financial institutions to recognize the risk they encountered. So the purpose of this study is to investigate the impact of internal control system on profitability of an organization and it is mainly based on employees’ perception on internal control system of Licensed Commercial Banks in Sri Lanka. Internal control system consists of control environment, risk assessment, control activities, communication and monitoring. The study selected a sample of permanent employees of 25 licensed commercial banks in Sri Lanka. The study used on primary data and it was collected using semi-structured questionnaires with open- ended and close-ended questions. Data was analyzed by using Statistical Packages for Social Science (SPSS). Descriptive statistical measures and the regression analysis were applied to analyze the data of the study. The results of the study showed that the internal controls have statistically significant impact on profitability. Furthermore, findings of the study revealed that the elements of internal control systems comprising control environment, control activities and monitoring have significant and positive impact on profitability in licensed commercial banks in Sri Lanka
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    Impact of Bank Specific and Macroeconomic Determinants on Commercial Banks Profitability: Evidence from Sri Lanka
    (4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) De Silva, N.H.A.H.; Abeywardena, D.K.Y.
    The financial intermediary is one of the most important financial functions of an economy. Among all financial intermediaries commercial banks are the most important intermediaries. Because they provide various services to lenders and vendors. The main focus of this study is to investigate the impact of bank specific and macroeconomic factors on the profitability of commercial banks in Sri Lanka. Eleven domestic commercial banks were selected as sample of this study and annually data were collected during the period of 2008 to 2017. Bank specific factors include bank size (SZE), operating cost (OC), capital adequacy (CA), liquidity ratio (LR) and asset quality (AQ) while GDP growth rate (GDP) and Inflation rate (IFR) selected as macro specific factors. The profitability measured by Return on Assets (ROA) selected as dependent variables. The multiple panel repression model were used to find out the explanatory power of independent variables on dependent variables and data were collected from annual reports of selected commercials banks and central bank reports. The finding of this study reveal that bank size and capital adequacy ratio positively impact on bank profitability while operating cost, liquidity ratio and asset quality negatively impact on bank profitability. And also Macro specific determinants, GDP growth rate and inflation rate found a significant positive impact on the bank profitability which measured by ROA. Substantive findings of this study will may guide in policy makers, investors, shareholders, employee to have better decisions when their decision making
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    Predictors of Profitability of Selected Microfinance Institutions in Sri Lanka.
    (8th International Conference on Business & Information ICBI – 2017, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2017) Wijesinghe, W. P. J. L.; Thrikawala, S. S.
    This study, conducted with the purpose of assessing profitability predictors of microfinance institutions (MFIs) in Sri Lanka. The study has been conducted by using a panel data analysis and the sample consists of nine MFIs for six-year period where data were collected through the audited financial reports. Institutional size, age, financing structure (FSR), quality of portfolio (QOP), operational efficiency (OER) as well as the debt equity (DER) considered as predictors of the study. Thus, the debt to equity forms a negative insignificant relationship with profitability while capital adequacy suggesting a positive insignificant relationship to the profitability. In the case of operational efficiency and quality of portfolio shows a negative relationship to the profitability as researcher expected. Further, institutional size and age as well as financial structure represent a negative insignificant relationship with profitability. It is required to concern about the operational efficiency of MFIs in Sri Lanka. Exempt to that the institutional SIZE, FSR, QOP, as well as DER, operating expenses has a significant impact to the MFIs profitability. The role of MFIs in an economic sustainability has quoted by many authors and other economic reports around the world. However, in Sri Lankan context, lack of the researchers has conducted on the profitability analysis based for recent years. Therefore, the current study equipped with the purpose of investigating predictors of MFIs profitability.
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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 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.
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    The Relationship between Working Capital Management and Corporate Profitability: Comparison between Manufacturing and Pharmaceutical Chemical companies in Sri Lanka
    (Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Kavishan, D.; Abeywardhana, D.K.Y.
    The objective of this research is to provide empirical evidence on the Relationship between Working Capital Management (WCM) and Corporate Profitability of Manufacturing and Pharmaceutical and Chemical companies in Sri Lanka. The Regression analysis is used as analytical techniques and the sample data collected for the period of Six years from 2010-2016 for 10 manufacturing companies and for 10 pharmaceutical and chemical companies listed in Colombo Stock Exchange (CSE). This study measures corporate profitability using Return on Assets (ROA) and independent variables are Inventory Turnover period (ITP), Average Collection Period (ACP) and Average Payable Period (APP) and control variables are firm size, debt ratio and sales growth. For pharmaceutical and chemical sector ITP and total assets shows significantly positive relationship with profitability and ACP, and APP is significantly negative with profitability. In contrast, for the manufacturing sector, ACP shows significantly negative relationship with profitability. This study suggests that Pharmaceutical and Chemical sector should focus on reducing the ACP and APP to increase the profitability thereby maximize the wealth of shareholders of the company. The firms in manufacturing sector should reduce the ACP to increase their profitability.