Browsing by Author "Mahasena, Senanayake"

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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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    Trends in working capital management and its impact on firms' performance : An analysis of Sri Lankan small and medium enterprises.
    (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. The purpose of this paper is to examine the trends in working capital management and its impact on firms' performance. The trend in working capital needs and profitability, liquidity, solvency and value added of firms are examined to identify the causes for any significant differences between the industries. The dependent variables of working capital strategy, profits, liquidity, solvency and value added appropriately measured is used to investigate the status quo of a sample of 25 small and medium enterprises, using panel data analysis for the period 2009 – 2012. The correlation results show that: high levels of short term finance is positively associated with financial risk levels: the hardcore working capital extent also reflects positive relations with the cash conversion cycle whilst both profitability and solvency states records positively to the value added quantum. The regression results 'all sectors' shows that high profitability and solvency states are associated with higher levels of value added and dividends. The key variables used in this analysis are value added, dividend and earnings per share, net assets and return on investment. Strong significant relationships between the stipulated variables have also been found in previous empirical work. No hidden champions of best practice were evident within the industries. The findings also reveal an increasing trend in the short term component of working capital financing.