Browsing by Author "Sudasinghe, S.L."

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Cashflow Indicators as a Predictive Tool for Financial Distress
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Gamage, A.D.W.; Sudasinghe, S.L.
Purpose: The main objective of the study was to identify the usefulness of cash flow indicators in predicting financial distress in manufacturing firms listed on the Colombo Stock Exchange (CSE) Design/Methodology/Approach: The study utilizes multiple regression analysis to explore the relationship between cash flow indicators and financial distress with the use of 65 companies over four years, from 2019 to 2022. In addition, control variables such as company size and return on assets (ROA) were also considered for the study. Findings: The results implied that the solvency indicator is a strong predictor of financial distress when combined with two control variables. The study suggests that cash flow indicators are not a useful method for determining financial distress in the Sri Lankan context on their own but can be valuable when combined with financial indicators such as company size and ROA. Originality: The findings of the study provide useful insights for stakeholders in understanding the relationship between cash flow indicators and financial distress and to mitigate the risk of failure. The study recommends techniques such as effective cash flow and interest management, prospective business expansion, and increasing income-generating assets to avoid bankruptcy.
Determinants of Tax Compliance among Small and Medium-Sized Enterprise Owners in Kandy District
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Gunarathna, W.M.N.R.; Sudasinghe, S.L.
Purpose: The main objective of the study was to identify the factors that influence tax compliance among small and medium-sized enterprise owners in Kandy District Design/Methodology/Approach: The current study has gathered the primary data from 100 SME owners in the Kandy district by using a questionnaire. The study used descriptive statistics, Pearson correlation, and regression analysis for each of the specific objectives, and data were analyzed by IBM SPSS. Findings: The findings of the research indicated that automation of tax filing, fairness of the tax system, tax awareness, and education had a strong positive correlation to tax compliance. Hence according to regression analysis, those three variables had a great positive impact on tax compliance. Further, the analysis indicates that the operational years, educational level, and income level had a significant effect on tax compliance however, gender did not significantly affect the tax compliance level of SMEs. Originality: While tax evasion leads to budget deficits for the government, tax compliance generates significant cash for the government to fund its projects. In this case, the SMEs, businesses, and individuals will adapt to the constantly evolving tax systems and will get a better understanding of the variables and their interactions with one another in the context of tax compliance.
The Impact of Internal Control System on Banks’ Performance: with Special Reference to Kandy District, Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Manangala, T.M; Sudasinghe, S.L.
Introduction: The main objective of the study was to identify how the internal control systems impact the performances of the banks in the Kandy district, Sri Lanka Design/Methodology/Approach: The sample size comprises 122 respondents from licensed commercial banks (People’s Bank, Bank of Ceylon) and 92 respondents from licensed specialized banks (National Savings Bank, Regional Development Bank) representing executive-level employees in the Kandy district. The researcher has used the control environment, control activities, risk assessment, information and communication, and monitoring as independent variables whereas the bank’s performance was the dependent variable. Data were analyzed using correlation analysis and multiple regression analysis. Findings: The findings indicated that the variables of the control environment, risk assessment, information and communication, and monitoring have a significant impact on banks’ performance while control activity has an insignificant impact on banks’ performance of banks. Originality: The management of the organization establish and uphold the highest standards of ethical behavior in the organization and implement awareness programs for staff members, including management, to inform policies and procedures. Also, the managers should design a pertinent organizational structure that includes essential areas of power and responsibility and send a clear message to employees about the significance of controls.
The Relationship between Market Risk and Financial Performance: Evidence from Sri Lankan Public Listed Companies
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Lakma, M.A.K.T.; Sudasinghe, S.L.
Purpose: The main objective of the study was to identify how market risk affects the financial performance of Sri Lankan publicly listed companies. Design/Methodology/Approach: The researcher chose a random sample of five sectors from the Colombo stock exchange. A maximum of fifteen companies were selected from the banking, food & beverage, material, capital goods, and diversified financial sectors based on the highest market capitalization. This study is based on the new sector classification (GICS) introduced by the Colombo Stock Exchange, effective January 1, 2020. The dependent variables are Return on Asset (ROA), Return on Equity (ROE), and Market Return while the Degree of Financial Leverage (DFL) has also been used as the control variable. The descriptive analysis, correlation, and regression analysis were carried out using the E-Views 08 software. Findings: The findings of the research indicated that market risk significantly improves financial performance. Even though a few sectors have insignificant negative impacts and insignificant positive impacts, many of the companies exhibited that the market risk significantly positively impacts market return. Originality: The research is beneficial to the investors to make investment decisions based on the sectors.