Browsing by Author "Shalini, A. S. C."

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    Impact of Accounts Receivable Management on Profitability: Evidence from the Listed Consumer Discretionary Sector Companies in Sri Lanka
    (Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Shalini, A. S. C.; Samarawickrama, A. J. P.
    Introduction: This research has aimed to investigate the impact of accounts receivable management on the profitability of the consumer discretionary sector firms in Sri Lanka. The focus is on key ratios such as inventory turnover ratio, average collection period, account receivables turnover ratio, cash conversion cycle, and their association with the profitability measures: including return on asset and return on equity. This research also finds that the firm size moderates these relations as well. Methodology: The paper uses a quantitative method and includes data from 23 white-listed consumer discretionary companies listed in the CSE, within the selected period from 2013 to 2023. In this study, multiple regression analyses are used to examine the effects of accounts receivable metrics on profitability with firm size being a control variable. To improve the validity of results, comprehensive diagnostics are conducted to evaluate conformity with normality, multicollinearity, heteroskedasticity, and autocorrelation tests. The inclusion of only white-listed firms helps to get a sufficient and statistically adequate number to analyze the characteristics of accounts receivable management in this sector. Findings: The findings point to the fact that lower collection periods, or shorter the cash conversion cycles, result in better accounts receivable management and lead to higher profitability as defined by ROA and ROE. It also reveals differences in the performance of receivable management practices across firms, suggesting the existence of distinct financial environments that should be addressed by the corresponding managerial solutions. Conclusion: The significance of accounts receivable management in enhancing the profitability of the consumer discretionary sector is further emphasised in this research finding. It does offer support for viable approaches to enhance sound credit management for enhanced cash flows and profitability. Financial managers and policymakers in the consumer discretionary sector should find these observations helpful in improving accounts receivable management and supervising financial activities. The study adds to the scarce literature in Sri Lanka regarding the understanding of financial management within the consumer discretionary industry and revealed the significance of accounts receivable management in maintaining the financial health of organizations in the country.