1st ICARE Student's Conference - 2015
Permanent URI for this collectionhttp://repository.kln.ac.lk/handle/123456789/10239
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Item The impact of capital structure on profitability of banks in Sri Lanka(Department of Accountancy, University of Kelaniya, 2015) Tharangani, D.L.M.The concept of capital structure means the way a firm finances its assets by the use of a mix of debt and equity. Capital structure decision is the important one, because the profitability of an enterprise is directly affected by such decision. In the financing decision the manager is concerned with determining the best financing mix or capital structure for his firm. According to Buser (1981), the capital structure decision of a bank is similar to that of a non-financial firm. The objective of this study is to examine the impact of capital structure on profitability of five banks in Sri Lanka from 2010 to 2014, to find an optimal capital structure that would be associated with the best performance and to suggest the banks in the way to increase profitability through adapting a better strategic framework of capital structure.. All data for this research will be collected by secondary data through financial statements. Based on the findings of the study, there are a few key points that can be used to conclude this study. It is very important that the total debt is the determining factor of profitability in the Banking Industry of Sri Lanka. The outcomes of the study may guide banks, loan-creditors and policy planners to formulate better policy decisions as far as the capital structure is concerned. Further, the study reinforces and refines the body of knowledge relating to capital structure and profitability in Sri Lankan Banks.Item Relationship between corporate social responsibility and profit in manufacturing industry(Department of Accountancy, University of Kelaniya, 2015) Manamperi, N.W.This paper explores the nature of the relationship between corporate social responsibility (CSR) and profit in manufacturing industry in Sri Lanka. Currently CSR activities are most valuable. CSR projects are contributed by lot of firms. Consumers and investors developed clear choice for socially responsible firms. Most of firms are allocation money for corporate social responsibility. Because through the CSR Activities increase the customer awareness, reputation; acclamation etc. Businesses must reconnect company success with social progress. This research goes into observe the manufacturing industry and in recommended CSR activities. Corporate social responsibility is profitable and adds value to a company is important to the development community because the private sector has far greater resources than government aid programming. This paper get information through the questionnaire, annual report data related CSR activity and analysis this data and gave a conclusion. The study finds a relationship between corporate social responsibility and profitability. Finally find the relationship between CSR and profit.Item The effect of the working capital management on profitability of Sri Lankan companies(Department of Accountancy, University of Kelaniya, 2015) Dharmasena, N.W.G.N.P.Most firms have a large amount of cash invested in working capital, as well as substantial amounts of short- term payables as a source of financing. Therefore working capital mainly affect for the company profitability and liquidity. A well-managed working capital promotes a company’s wellbeing on the market in terms of liquidity and it also acts in favor for the growth of shareholders value (Jeng - Ren, Li & Han-Wen, 2006). Management of these short- term assets and liabilities warrants a careful investigation since the working capital management plays an important role for the firm’s profitability & risk as well as value (Smith, 1980). The main objective of this research is to find out the relationship between working capital management and company profitability. To collect the required financial data of these firms was obtained from the companies’ annual reports from CSE. Consequently, the sample data begins in 2010 and ends in 2014. The effects of working capital management on the firm's profitability are modeled using the following OLS regression equations to obtain the estimates. This study expects most of the Sri Lankan companies have large amounts of cash invested in working capital. It can be expected that the way in which working capital is managed will have a significant impact on profitability of those firms.Item The relative importance of working capital management and its components to SMES’ profitability(Department of Accountancy, University of Kelaniya, 2015) Priyadarshani, M.R.The focal point of extant research is the importance of working capital management (WCM), measured by cash conversion cycle (CCC), and all its components (inventory, accounts receivables and accounts payables) on the profitability of predominantly large firms (Deloof, 2003; Padachi, 2006; Garcia-Teruel and Martinez-Solano, 2007; Banos-Caballero et al., 2010). Such research has been carried out on the implicit assumption that large firms have the necessary resources (e.g. financial, technology and personnel) to manage all components of working capital. Literature on SMEs, however, suggests that such firms have limited resources compared to their large firm counterparts that may prevent them from managing all components of working capital. For example, research has found that SMEs are poorly managed due to the lack of management competence of their owner-managers (Gockel and Akoena, 2002; Pansiri and Temtime, 2008). The Small Business Research Centre (1992) also found management skills to be one of the barriers to SMEs’ growth. The nature of the relationship between WCM and profitability depends on the strategy that the firm decides to pursue (Weinraub and Visscher, 1998; Garcia-Teruel and Martinez-Solano, 2007; Nazir and Afza, 2009). A firm can also adopt a conservative strategy to WCM which advocates an increase in investment in working capital. This strategy is adopted with the view of stimulating sales by increasing both inventories and receivables in order to increase profitability. An increase in inventories can prevent production disruptions (Garcia-Teruel and Martinez-Solano, 2007). The relationship between WCM measured by the CCC and profitability was found to be negative and significant by Raheman et al. (2010), Hayajneh and Yassine (2011) and Karaduman et al. (2011), consistent with the aggressive strategy of WCM. However, a positive and significant relationship was reported by Raheman and Nasr (2007), Mathuva (2010), Nobanee and Alhajjar (2009) and Stephen and Elvis (2011), which supports the conservative strategy of WCM.Item Effects of corporate social responsibilities on performance of banking sector(Department of Accountancy, University of Kelaniya, 2015) Sampath, M.G.I.Corporate social responsibility refers to the company's effects on the environment and impact on social welfare. According to one of the most frequently cited definitions, Corporate Social Responsibility (CSR) is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis. Corporate social responsibilities are more important to service sector organizations because they are directly deal with customers. There is competition among banks to attract more customers by providing CSR to public. Therefore it is better to understand the relationship between corporate social responsibility and performance of Banks. The main purpose of this study was identifying the relationship between Corporate Social Responsibility and firms’ performance. To achieve this main objective sub objectives such as, how CSR effect on firms performance, whether it highly influenced on short term or long term, to identify the influence of CSR on profitability over a period of Five years, to measure the individual effect of employee relations, and public relations on profitability will be followed. This study is concerned with the information disclosed in the annual reports, as well as primary data sources. According to the result of the regression analysis researcher found that there in a positive relationship between CSR and the profitability of banks, CSR is highly influenced on long term profitability, there was a significant influence from employee related expense and public CSR expense is not significantly influence on short term profitability but in long term it was significantly influenced.Item The effect of capital structure on profitability in Sri Lankan company(Department of Accountancy, University of Kelaniya, 2015) Madhubhashani, M.A.C.D.The capital structure decision is essential for any business organization. To understand how companies finance their operations, it is necessary to examine the determinants of their financing or capital structure decisions. Weston and Bringham (1978) define capital structure as the permanent financing of the firm represented by long-term debt plus preferred stock and net worth. Capital structure decision is the vital one since the profitability of an enterprise is directly affected by such decision. The successful selection and use of capital is one of the key elements of the firms’ financial strategy (Velnampy & Aloy Niresh, 2012). This paper seeks to investigate the relationship between capital structure and profitability of listed companies on the Colombo Stock Exchange (CSE) during a five-year period. In order to meet the objectives of the study, data will collect from secondary sources mainly from financial report of the selected companies and regression analysis is used as the methodology in this paper. Variables used for the analysis include profitability and leverage, equity ratios. Profitability measured by Return on Assets (ROA). Expected outcome of this paper is to develop a theory relating to the capital structure and profitability based on the Sri Lankan Context.Item The impact of credit risk management on the performance of banking sector(Department of Accountancy, University of Kelaniya, 2015) Abewardhana, M.A.Credit risk management in banks has become more important not only because of the financial crisis that the industry is experiencing currently, but also a crucial concept which determine banks’ survival, growth and profitability. The aim of this study is to investigate the impact of credit risk management on the performance of banking sector in sir Lanka. Financial reports of seven commercial banking firms were used to analyze for seven years (2005 – 2011). The panel regression model was employed for the estimation of the model. In the model, Return on Equity (ROE) and Return on Asset (ROA) were used as the performance indicators while Non-Performing Loans (NPL) and Capital Adequacy Ratio (CAR) as credit risk management indicators. The findings revealed that credit risk management has a significant impact on the profitability of commercial banks’ in sir Lanka. Banks today are the largest financial institutions around the world, with branches and subsidiaries throughout everyone’s life. Commercial banks are facing risks when they are operating. Credit risk is one of the most significant risks that banks face, considering that granting credit is one of the main sources of income in banks. The management of the risk related to that credit affects the profitability of the banks. The aim of the research is to provide stakeholders with accurate information regarding the credit risk management of banking sector with its impact on profitability.Item The relationship between working capital management and profitability of business(Department of Accountancy, University of Kelaniya, 2015) Bandara, A.B.M.M.H.The working capital management is important because of its effects on the firm’s profitability and risk, and consequently its value. Specifically, working capital investment involves a tradeoff between profitability and risk. Working capital management is direct impact on liquidity and profitability, in attention to the liquidity management process may cause severe difficulties and losses due to adverse short-run developments even for a firm with favorable long-run prospects. The purpose of this research is to provide empirical evidence on the effects of working capital management on the profitability of listed companies of the manufacturing sector in Sri Lanka. Working Capital Management has its effect on liquidity as well on profitability of the firm. In this research, I have selected the Sri Lankan manufacturing firms which are listed in the Colombo stock exchange for a period of 5 years from 2009 – 2014. Data collection will be mainly based on secondary evidence methods including annual reports and financial statements and, previous financial statements. This study uses the effect of different variables of working capital management including the Average collection period, Inventory turnover in days, Average payment period and cash conversion cycle from operating activities, total current assets and total current liabilities on the Net operating profitability of having Sri Lankan manufacturing firms. Empirical evidence relating working capital management and profitability in general supports the fact that aggressive working capital policies enhance profitability. This suggests that reducing working capital investment is likely to lead to higher profits.