13th Students’ Research Symposium 2023/2024
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Item The Impact of Capital Structure on Firm Performance: A Comprehensive Analysis of the Sri Lankan Plantation Companies Before and During the Crisis Evidence From Selected Listed Plantation Companies in Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Vitharamage, V. N. R.; Gunasekara, H. M. A. L.Introduction: The purpose of this study is to determine the impact of capital structure on firm performance. This study provides a comprehensive analysis of the Sri Lankan plantation companies before and during the crisis as this sector remains an unexplored area which plays an important role in their economies. Methodology: This research uses positivism research philosophy and the quantitative research approach and uses the convenience sampling method. This study is primarily based on secondary data that were extracted from the annual reports of companies listed in Colombo Stock Exchange (CSE) over the past eight-year period from 2016 to 2023. Balanced Panel Data (BPD) of 15 plantation companies were analyzed using STATA software, which included statistical tests such as normality, multicollinearity, heteroscedasticity, autocorrelation, cross sectional dependance, and panel regression analysis. Further this study uses a comparison test to identify the statistical difference in the periods. Findings: According to the findings of the study, the results confirm that there is a statistically significant difference in terms of ROE and ROA before and during the crisis. All the independent variables, excluding TDTE, also show a statistically significant difference between the periods. According to the regression analysis, it shows a negative and statistically significant relationship between TDTE and ROE and positive and statistically significant relationship between ICR and ROE. TDTA negatively impacts ROA, and the effect is statistically significant. As well as there is a statistically significant causal relationship between ROA and Interest Coverage Ratio. Finally, the overall models are statistically significant. Conclusion: The findings indicate that the crisis had a notable effect on plantation companies' financial performance and suggest that debt is not a primary strategy to cope with the crisis. Therefore, this study is advisable for firms to consider their funding strategies and manage their total debt wisely to sustain the overall performance by adapting to the market conditions.Item The Impact of Financial Risk on Financial Performance Before and During the Crisis: Evidence from Listed Consumer Service Sector Companies in Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Wedaarachchi, W. A. T. N.; Gunasekara, H. M. A. L.Introduction: The purpose of this study is to investigate the impact of financial risk on the financial performance of listed consumer service sector companies in Sri Lanka before and during the crisis. This research aims to identify whether the financial performance measures and financial risk measures have been statistically different before and during the crisis and to identify the causal relationship between financial risk and financial performance. Methodology: Panel regression analysis is used in the study to investigate how operational risk, liquidity risk, market risk, and credit risk impact Return on Equity (ROE) and Return on Assets (ROA). Nineteen listed consumer service sector companies were selected, and the sample period was from 2016 to 2023. Secondary data was collected from the annual reports and websites. For testing the statistical difference between before and during the crisis, this study used a sample t-test with unequal variances and the Wilcoxon rank sum test. Findings: Operational risk and market risk have a significant positive impact on both ROE and ROA, while liquidity risk has a statistically insignificant effect on both ROE and ROA. Credit risk has a negative but significant relationship with both ROE and ROA. According to the sample t-test with unequal variances and Wilcoxon rank sum test, all variables are statistically different between the periods before and during the crisis. Conclusion: This study highlights the critical role of effective financial risk management in sustaining profitability during economic crises. While operational and market risks were associated with improved financial outcomes, higher credit risk severely impaired financial performance. The significant decline in both ROE and ROA during the crisis emphasizes the vulnerability of consumer service sector companies to economic disruptions.Item The Effect of Capital Structure on Firm Performance: Evidence from Listed Diversified Financials Sector Companies in Colombo Stock Exchange: Pre- Crisis vs. Economic Crisis(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Ishanka, G. A. C.; Gunasekara, H. M. A. L.Introduction: This study investigates the impact of capital structure on the financial performance of diversified financial sector companies listed on the Colombo Stock Exchange (CSE) during pre-crisis (2014–2020) and crisis (2021–2023) periods. The objectives of the study are to evaluate the strength of the causal relationship between capital structure and firm performance of the listed diversified financial sector companies between the periods of 2014-2023 and to check whether there is a statistically significant impact between the capital structure and firm performance of the listed Diversified Financial sector companies before and during the economic crisis periods (2014-2023). This study addresses this gap by examining the effect of debt on three key performance metrics: Return on Capital Employed (ROCE), Return on Assets (ROA), and Tobin’s Q. Methodology: The research follows a quantitative approach using secondary data from 27 listed diversified financial firms. Panel data regression will be used for the analysis to evaluate the relationship between capital structure and firm performance, with firm age, size, tangibility, and sales growth as control variables. The economic crisis is incorporated as a dummy variable to assess its effect on firm performance. Descriptive statistics and t-tests are used to identify differences in firm performance between pre-crisis and crisis periods. Findings: The findings indicate a significant negative relationship between the debt-to-equity ratio and all three performance indicators (ROCE, ROA, and Tobin’s Q) and ROA, ROCE are significantly impacted by the Economic Crisis and Tobin’s Q is not impacted by the Economic Crisis. Conclusion: Capital Structure and Firm Performance is a highly discussed topic among researchers. However, studies done on specific sectors are very rare in the Sri Lankan context. Furthermore, the study has incorporated the economic crisis as well. Therefore, this study will provide insights into future research on this topic.Item The Effect of Capital Structure on Firm Performance: Evidence from Listed Capital Goods Sector in Colombo Stock Exchange: Pre-Crisis vs. Economic Crisis(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Madhushika, N. G. S.; Gunasekara, H. M. A. L.Introduction: This study investigates the impact of capital structure on the financial performance of firms in the capital goods sector listed on the Colombo Stock Exchange (CSE) in Sri Lanka. The analysis covers the period from 2014 to 2023, distinguishing between the pre-crisis (2014-2020) and economic crisis (2021-2023) periods to understand the role of the economic crisis as a dummy variable. Firm performance is measured using Return on Assets (ROA), Return on Capital Employed (ROCE), and Tobin’s Q, while the debt-to-equity ratio serves as the independent variable. Control variables include firm size, age, tangibility, and sales growth. Methodology: Using a quantitative approach, secondary data from 22 listed firms were analyzed using panel data regression through descriptive analysis, correlation analysis, panel regression analysis, and t-tests. The study used a positivism approach. Random effect panel regression models were used to analyze the data. Findings: The findings indicate a significant negative relationship between the debt-to-equity ratio and all three performance indicators (ROCE, ROA, and Tobin’s Q) and ROA, ROCE are significantly statistically impacted by the Economic Crisis and Tobin’s Q is not statistically impacted by the Economic Crisis. Conclusion: The study concludes that higher debt ratios negatively affect firm performance, with this impact being more pronounced during an economic crisis. The findings highlight the need for firms to adopt timely capital structure decisions, especially in uncertain economic conditions.Item Dividend Policy and Shareholder Wealth of Listed Financial Service Companies in Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Anojan, K.; Gunasekara, H. M. A. L.Introduction: Dividend policy is a key topic in corporate finance, traditionally linked to firm valuation and shareholder wealth. This study examines how Dividend Per Share (DPS), Dividend Payout Ratio (DPR), Dividend Yield (DY), and Return on Equity (ROE) influence Earnings Per Share (EPS). Focusing on Sri Lanka's financial sector from 2014–2023, it explores whether disciplined dividend policies enhance profitability per share amid economic challenges. Methodology: The research uses secondary data from eight listed financial institutions, encompassing both banking and non-banking entities. Key variables (DPS, DPR, DY, ROE, and EPS) were analyzed using multiple regression. Hypotheses tested include the positive effects of DPS, DPR, DY, and ROE on EPS, with descriptive statistics and data integrity checks conducted to support the analysis. Findings: Results reveal significant positive links between dividend policy variables, ROE, and EPS. Firms with robust dividend practices and efficient equity utilization exhibit stronger EPS. This suggests that dividends serve as signals of financial health, reflecting governance quality and resource efficiency, while supporting overall profitability. Conclusion: The study highlights a significant relationship between dividends and EPS. Stable dividends may indicate strong fundamentals and foster market confidence, particularly in emerging markets like Sri Lanka. Managers, investors, and policymakers can use these insights to align dividend strategies with long-term profitability goals. Future research is encouraged to explore causality and broader contextual applications.Item Determinants of Capital Structure: An Analysis of Pre and During Economic Crisis – Evidence from Listed Consumer Services Sector Companies in Sri Lankan Stock Exchange(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Wijenayake, K. D. D. I.; Gunasekara, H. M. A. L.Introduction: Leverage plays a vital role in optimizing capital structure, and identifying determinants of leverage across varying economic conditions is crucial for strategic financial management. However, limited research focuses on recognizing key determinants of leverage in the consumer service sector in Sri Lanka, creating a gap in understanding its unique leverage dynamics and determinants. To fill this gap, this research endeavor aimed to examine the determinants of financial leverage in consumer service companies in Sri Lanka, with a specific focus on how these determinants behave before and during an economic crisis. Methodology: This study adopted a quantitative methodology to investigate the impact of firm profitability, size, asset tangibility, and growth on leverage, measured by the long-term debt-to-asset ratio. Data were collected from 15 listed Sri Lankan consumer service corporations, selected by size, covering eleven years from 2014 to 2024. Panel regression analysis was performed to identify the effects of these variables on leverage under different economic conditions. Findings: Profitability consistently showed a notable adverse effect on leverage, intensifying during downturns as firms prioritized internal financing to mitigate risks. Asset tangibility positively influenced leverage but diminished in relevance during crises. Firm size positively impacted leverage over the years, but larger firms adopted conservative financing strategies during economic uncertainty, mirroring smaller firms. Growth consistently exhibited an adverse effect on leverage, as growing firms avoided excessive debt, favoring financial stability. Conclusion: The impact of these determinants slightly weakened during crises due to restricted access to external financing. This emphasizes the importance of understanding contextual factors that influence financial decisions during periods of instability. These findings benefit corporate managers and policymakers by enabling more informed strategies for risk management and sustainable finance.