9th Students' Research Symposium 2020
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Item Impact of Liquidity Management on Profitability: With Special Reference to Listed Material Sector Companies in Sri Lanka(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Waidyarathne, G.R. P. S.; Ranjani, R. P. C.The ultimate goal of the companies is to enhance the wealth of the shareholders. Specially the liquidity and its management are caused to a great extent of the growth and profitability of a firm. The insufficient liquidity may unfavourable to the smooth operation of the firm as well as the additional liquidity can be disturbed to profitability. This research sought to establish the relationship between liquidity and profitability of listed material sector companies in Colombo Stock Exchange of Sri Lanka. This research is based on 16 material sector companies listed in Colombo Stock Exchange over the last eight years from 2013 to 2020. In this research, the liquidity ratios and Cash conversion cycle are identified as independent variables with of Firm Size and Debt Ratio as control variables and profitability as dependent variable. Regression Analysis, Correlation Analysis, and Descriptive Statistics used as the analytical tools of this study. The data analysed using Econometric views (E-views) Based on the regression estimates, the study revealed that the cash and quick ratio, payable outstanding and firm size has a significant positive impact on profitability while debt ratio has a significant negative impact on profitability. The final result concludes that the overall model is statistically significant, and there is a positive relationship between liquidity ratios and a firm’s profitability while the cash conversion cycle hurts profitability. And also, the debt ratio has a negative impact on profitability while firm size has a positive impact.Item The Impact of Cash Conversion Cycle on Firms’ Profitability: A Comparative Study of Food, Beverage and Tobacco Companies and Consumer Services Companies Listed in CSE(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Mihirangi, H. H. N.; Ranjani, R. P. C.Based on the working capital management principle, the concepts of the cash conversion cycle can be identified as a powerful performance measure for assisting how well a company is managing its working capital. The study attempts to examine the Impact of Cash Conversion Cycle on Firms’ Profitability via two different industrial sectors. The impact of the firm’s cash conversion cycle on the profitability is examined using 35 Food, Beverage and Tobacco Companies and 25 Consumer Services Companies Listed in CSE for the period of 2015 to 2019. Descriptive Statistical Analysis, Correlation analysis and regression analysis are the data analytic tools used to analyse data in this study. The study revealed a significant negative impact on the Profitability of the Food, Beverage and Tobacco Companies by the length of the Cash Conversion Cycle. However, the Cash Conversion Cycle of the Consumer Services Companies has no significant impact on the profitability. The findings will help for future studies to generalization of the findings beyond the Food, Beverage & Tobacco Industry and the Consumer Services Industry by using different industries, institutes and countries with different institutional characteristics and financial systems.Item The Impact of Intellectual Capital on Firms’ Financial Performance: A Comparative Study of Manufacturing and Banking Sectors Listed in Colombo Stock Exchange(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Piyumali, G. N.; Ranjani, R. P. C.The importance of intangible assets rather to tangible assets has increased due to the changes in business environment over the past few decades. The purpose of this study is to examine the impact of intellectual capital (IC) on firms’ financial performance in Sri Lanka, especially for the manufacturing and banking sectors. Secondary data on 36 listed firms, comprising 24 manufacturing sector and 12 from the banking sector, are collected from Colombo Stock Exchange for 7 years from 2013- 2019. IC and its components are computed using Public’s value added intellectual coefficient model and firms’ performance is measured by return on asset (ROA). Ordinary Least Square approach and Random effect regression model is used to investigate the hypothetical relationship between IC and firms’ performance. The results show that there is a significant positive impact of IC on firms’ financial performance of both manufacturing and banking sectors. Although there is a significant positive impact to both the sectors, the impact to the manufacturing sector is much higher than the banking sector. HCE, SCE and CEE positively associated with ROA for both the sectors, while CEE insignificant to the financial performance of manufacturing sector. CEE variable is doing more impact to the banking sector while HCE and SCE doing more impact to the performance of manufacturing sector. Final results of this study concludes that the overall model is statistically significant as well as fulfil the existing research gap. Researcher conclude that there is a significant positive impact of intellectual capital on firms’ financial performance for both manufacturing and banking sectors in Sri Lanka.Item The Impact of Debt Financing on Firms’ Financial Performance: Evidence from Listed Manufacturing Companies in Sri Lanka(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Suraweera, M. H. B. N.; Ranjani, R. P. C.Every company face a common issue whether to use equity financing, debt financing or some hybrid of these in deciding their capital structure. Because, it is a managerial decision that affect to the shareholders’ risk and return. The purpose of this study is to examine the relationship between debt financing and financial performance of listed manufacturing companies in Sri Lanka. This study uses Ordinary Least Square approach and random effect model to analyse panel data sample of 16 manufacturing companies listed under the Colombo Stock Exchange during the 2013-2019 period. This study follows the random sampling method to collect the data. Descriptive Analysis, Correlation Analysis, Multicollinearity, Normality Test, Regression Analysis and Hausman Test were used to analyse and interpret the results by using E- views as the statistical software. The results shows that there is a significant negative impact of debt financing on firms’ financial performance because, long term debt financing and short-term debt financing have significant negative impact on financial performance of manufacturing companies in Sri Lanka. Furthermore, long term debt is the highly impacted debt financing method on financial performance. There is no any significant impact of firm size and firm age on financial performance of manufacturing companies in Sri Lanka. Final results of this study concludes that the overall model is statistically significant as well as fulfils the existing research gap. Researchers conclude that there is a relationship between debt financing and financial performance of manufacturing companies in Sri Lanka.Item A Study on Influencing Factors on Consumer Purchase Decision for a Leasing Product (With Special Reference to HNB Finance Ltd)(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Erandi, W. A. S.; Ranjani, R. P. C.The leasing industry is growing so high with competitions and the market growth of the finance industry in dividing for lots of companies. The current study conducted to address the leasing product in HNB Finance Ltd., because it is the one of competitive industry which all the competitors are always create an individual succeeded and unsuckered. Due to the service failures occurred in leasing product in HNB finance, it faces issues in their business. The primary objective of this research is to find out the factors affecting to consumer purchase decision in Leasing product of HNB Finance Ltd. Researcher developed a conceptual framework based on literature and identified Brand Awareness, Product Features, Service Quality, Customer Relationship Management, and Convenience as influencing factors. Researcher collected data through a questionnaire of selected 100 samples from Western Province and analyzed the data by using SPSS tool. Through SPSS researcher done Descriptive analysis, Regression Analysis, Correlation Analysis and ANOVA. Based on the analysis, Product features, Customer relationship management and Convenience have a significant positive relationship with consumer purchase decision while brand awareness and service quality have negative impact on consumer purchase decision. Finally, researcher given recommendations according to the conclusions gathered to make new strategies and overcome the current problem in the product. Based on findings recommendations have made in order to utilize resources on accepted variables to enhance effectiveness.Item Leverage and Firm Growth: With Special Reference to Companies in Food and Beverage Industry Listed in Colombo Stock Exchange(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Silva, G.M. D. T.; Ranjani, R. P. C.Optimum capital structure leads to growth of any organization. Review of literature suggest that the relationship between leverage and firm growth is inconclusive. Hence researcher intends to identify the relationship between leverage and firm growth in terms of Revenue growth and asset growth for the companies in food and beverage industry listed in Colombo Stock Exchange. Probability Sampling method of systematic sampling technique were used to select 20 companies out of 47 companies that were listed under the food and beverage sector. Panel data for the period from 2011 to 2020 with 20 cross sections were tested using Ordinary least square estimates to analyze the data. The dependent variable is firm growth which were tested in two models in terms of revenue growth and Asset growth. The independent variable used was leverage which was calculated using debt to asset ratio. Further the control variables of firm size, ROA and investment opportunities were used to measure the impact from them on firm growth. There is a significant positive relationship between leverage and revenue growth and an insignificant positive relationship between leverage and asset growth. Further the Firm size is negatively related to firm growth while the profitability is positively related to firm growth. This study concludes how leverage effect to firm growth of food and beverage industry in Sri Lanka. This is important because companies use leverage for expansion and innovation which in term increases firm growth. Therefore, the Outcome of this study is very crucial to managers of a company to make better decisions regarding to financial resources of a company and to manage the company for high financial efficiency.Item Impact of Macro Economic Variables on Corporate Capital Structure: Evidence from Colombo Stock Exchange(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Kalpana, M. L. A. W.; Ranjani, R. P. C.Capital structure decisions are very important for a firm because it helps to determine the value of a firm. This study focusing on analysing capital structure, aiming to identify how listed entities of Colombo stock exchange behave in terms of sensitivity to different types of macroeconomic factors in Sri Lanka. Probability sampling method of quota sampling technique is used in drawing 50 companies from 5 non-financial subsectors including Consumer Durable & Apparels, Consumer Services, Healthcare & Equipment, Food & Beverage and Tobacco, and Material. Cross sectional data series for the period from 2010 to 2019 and Generalized Method of Moment Estimate is used to analyse the data. Independent variables are GDP growth Rate, Government Debt, Money Supply, Exchange Rate and Price Index. Tangibility is used as a control Variable. Debt Ratio represents the capital structure which is dependent variable in this research. GDP growth Rate, Government Debt and Price index have significant positive impact on Debt Ratio and Money Supply and Exchange Rate have significant Negative Impact on Debt Ratio, GDP growth Rate, Government Debt and Price index have significant positive impact on Debt Ratio and Money Supply and Exchange Rate have significant negative impact on Debt Ratio. Outcome of this study suggest that there is a significant impact of macro-economic factors on corporate capital structure. The findings of the study will help corporate managers in making financing decisions while considering the potential impact that these macroeconomic variables can have on their financing decisions as well as economic policy makers to manage fiscal and monetary policy in line with long term objectives.Item The Effect of Corporate Governance on Financial Leverage of Companies Listed at Colombo Stock Exchange(Department of Finance Faculty of Commerce and Management Studies University of Kelaniya, 2020) Wijesinghe, W. A. I. R.; Ranjani, R. P. C.Good corporate governance enables the companies to reduce the risk and cost of capital, reduce the conflict and fraud, increase the overall company performance and improve the efficiency and effectiveness of financial markets. Hence, the purpose of this study was to examine the effect of corporate governance on financial leverage of companies listed at Colombo Stock Exchange. The study is conducted based on quantitative approaches by using financial information of 77 listed companies in the Colombo Stock Exchange during the time period from 2013 to 2020. Stratified sampling method is used to select the 77 listed companies. Dynamic panel data: Generalized Method of Moments (GMM) regression is used to identify the relationship between the corporate governance and financial leverage. The dependent variable is Financial Leverage (FL) while independent variables are CEO Duality (CEOD), Board Size (BSIZE), Board Composition (BCOMP), Board Committees (BCOMM) and Managerial Ownership (MO). The finding reveal that the CEO duality and board size are significantly negatively related to the financial leverage, whereas board committees are found to be significantly positively correlated. Although there was no significant relationship between financial leverage, board composition and managerial ownership. This study concluded that better corporate governance Mechanisms significantly affect the financial leverage of listed companies in the Colombo Stock Exchange in Sri Lanka except for board composition and managerial ownership. Hence, corporate governance mechanisms have an impact on financial leverage of companies listed on the Colombo Stock Exchange.