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Start date: 2020Subject: search.filters.subject.Financial performance

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    The Impact of Firm-Specific and Macro-Economic Factors on Financial Performance: Evidence from Listed Finance Companies in Sri Lanka
    (Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Nisansala, E. K. S.; Tennekoon, S. T. M. S.
    Introduction: Company performance plays an important role in national economic growth and employment creation in the country. Both macro and microeconomic factors influence a firm’s performance. This study seeks to examine the impact of firm-specific and macroeconomic factors on the financial performance of listed finance companies in Sri Lanka. It tries to find out the various factors which determine the company performance of listed finance companies. Methodology: The study investigates the effect of the inflation rate, interest rate, and gross domestic product (GDP) growth rate, while the firm characteristics were firm size, leverage, and capital ratio. The dependent variable financial performance is measured as return on assets (ROA). The analytical approach involves employing panel data regression techniques using STATA. Data for analysis were sourced from company annual reports and Central Bank reports covering the period from 2014 to 2023 inclusive of both years. There are 35 CSE-listed entities under the diversified financial industry, out of which this study sample contained 33 entities. Findings: According to the findings, the GDP growth rate and inflation rate had a positive and significant effect, while the interest rate had a positive but non-significant effect on the financial performance of listed finance companies in Sri Lanka. Second, the firm characteristics demonstrate that firm size had positive and significant effects on return on assets (ROA) while leverage had a negative significant effect on return on assets (ROA). Conclusion: This research provides valuable insights to policymakers, professionals in finance, and management teams of finance companies in Sri Lanka. This study adds to the existing literature on how internal and external variables influence company outcomes by analyzing the effect of firm-specific and macroeconomic factors on financial performance using return on assets as a measure.
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    The Impact of Financial Performance on The Share Price: Evidence from Listed Finance Service Sector Companies in Sri Lanka
    (Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Amarakoon, A. A. N. N.; Buddhika, H. J. R.
    Introduction: Financial performance is an important factor in attracting investors to buy shares and make investment decisions. This study examines the impact of financial performance on the share prices of the financial service sector in Sri Lanka. Therefore, the main purpose of the study is to explore “Is the relationship between financial performance and share price,” with special reference to the listed financial service sector in Sri Lanka. Methodology: Return on Assets (ROA), Return on Equity (ROE), Net Profit Margin, Earnings Per Share (EPS), and Debt to Equity Ratio (D/E) were used as the dimensions of financial performance, while closing market price was used as the proxy for the share price. Secondary data was used and obtained from published annual reports in respective companies and the CSE website. A quantitative research design was employed, analyzing panel data from 21 listed companies including finance, banking, and insurance companies over the period of 2015–2023, yielding 189 observations. Findings: According to the study's findings, two independent variables, such as return on assets and earnings per share, had a statistically significant relationship with the dependent variable of share price, and other independent variables had not statistically significant relationship with the dependent variable. The result highlights that the overall models are statistically significant. The study found out that there is a strong impact of earnings per share (EPS) and return on assets (ROA) on share prices of the financial service sector in Sri Lanka. Conclusion: The findings of the study have practical implications for investors and stakeholders to make their decisions respectively. Also, this study concludes that the proxy of financial performance can be used for investors to make decisions in respect to investing in shares in the financial service sector in Sri Lanka.