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Item Impact of Accounts Receivable Management on Profitability: Evidence from the Listed Consumer Discretionary Sector Companies in Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Shalini, A. S. C.; Samarawickrama, A. J. P.Introduction: This research has aimed to investigate the impact of accounts receivable management on the profitability of the consumer discretionary sector firms in Sri Lanka. The focus is on key ratios such as inventory turnover ratio, average collection period, account receivables turnover ratio, cash conversion cycle, and their association with the profitability measures: including return on asset and return on equity. This research also finds that the firm size moderates these relations as well. Methodology: The paper uses a quantitative method and includes data from 23 white-listed consumer discretionary companies listed in the CSE, within the selected period from 2013 to 2023. In this study, multiple regression analyses are used to examine the effects of accounts receivable metrics on profitability with firm size being a control variable. To improve the validity of results, comprehensive diagnostics are conducted to evaluate conformity with normality, multicollinearity, heteroskedasticity, and autocorrelation tests. The inclusion of only white-listed firms helps to get a sufficient and statistically adequate number to analyze the characteristics of accounts receivable management in this sector. Findings: The findings point to the fact that lower collection periods, or shorter the cash conversion cycles, result in better accounts receivable management and lead to higher profitability as defined by ROA and ROE. It also reveals differences in the performance of receivable management practices across firms, suggesting the existence of distinct financial environments that should be addressed by the corresponding managerial solutions. Conclusion: The significance of accounts receivable management in enhancing the profitability of the consumer discretionary sector is further emphasised in this research finding. It does offer support for viable approaches to enhance sound credit management for enhanced cash flows and profitability. Financial managers and policymakers in the consumer discretionary sector should find these observations helpful in improving accounts receivable management and supervising financial activities. The study adds to the scarce literature in Sri Lanka regarding the understanding of financial management within the consumer discretionary industry and revealed the significance of accounts receivable management in maintaining the financial health of organizations in the country.Item A Study on Relationship between Working Capital Management and Firms’ Performance: Comparison between Manufacturing Sector and Food & Beverage Sector in Colombo Stock Exchange(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Karunarathne, R.M.H.L.; Karunarathne, W.V.A.D.This study examines the relationship between working capital management (WCM) on firms’ performance and also compare the correlation results in between manufacturing sector and the food and beverage sector firms in Sri Lanka. The goal of WCM is to ensure that the firm is able to continue its operations and that it has adequate cash flows to satisfy both maturing shortterm debt and upcoming operational expenses at minimal costs, and consequently, increasing corporate profitability (Angahar & Alematu, 2014). Though empirical evidence exists on the topic, yet there is an uncertainty in determining the optimum level of WCM, especially in Sri Lankan context. Since WCM may be different from industry to industry, firms have to adopt an appropriate WCM approach which is favorable to particular industrial sector. Hence this study compare the relationship between WCM and the firm’s performance of eighteen manufacturing firms and eighteen food & beverage firms listed in the CSE. Data were gathered from annual reports of the sampled firms for the period 2011-2015. The WCM measured in terms of Inventory Turn-over Days (ITD), Average Receivable Days (ARD), Average Payable Days (APD), Cash Conversion Cycle (CCC) and Sales Growth Rate (SGR) whereas performance was measured by the return on assets (ROA). According to the data analysis, there was a negative correlation between ROA and CCC, ITD, ARD. In addition to that, there was a positive correlation between APD and SGR with ROA. There was a significant relationship between WCM and firms’ performance in manufacturing and food & beverage sector. Keeping an optimal level of liquidity of the manufacturing and food & beverage sector and the value of the managers of companies in the manufacturing and food & beverage sector will have to increase the value of the firm thereby controlling the level of optimal working capital position.Item Working Capital Management and Its Impact on Profitability: A Study of Selected Listed Hotels and Travels Companies in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Priyadarshani, M.R.; Abeywardhana, D.K.Y.The management of working capital can be defined as an accounting approach that emphasize on maintaining proper levels of both current assets and current liabilities. The management of working capital relates managing inventories, accounts receivable, accounts payable and cash. Working Capital Management (WCM) is a powerful element in any organization. For the reason behind that, the main working capital components such as Average Collection Period (ACP), Average Payable Period (APP), Inventory Conversion Period (ICP) and Cash Conversion Cycle (CCC) are directly impact to the firm’s performance. Consequently in this study also used these variables as the independent variables. Return on Assets (ROA) is used as a measure of profitability as well as dependent variable. Current Ratio (CR), Debt Ratio (DR), Firm Size (SIZE) and Sales Growth (GROWTH) are the control variables that used in present study to compute the WCM impact on profitability. This paper analyzes the WCM and its impact on profitability in Sri Lanka for the period of 2011 to 2015. The population consists with 38 hotel and travel companies listed in Sri Lankan Colombo Stock Exchange and the sample contains 20 companies of the above mentioned population. Pearson’s correlations and ordinary least square regression method were used to establish the relationship between WCM and firm’s profitability. This study finds that positive relationship between return on assets and ICP, CCC and CR. On the other hand present study suggests that there is a negative relationship between ROA and ACP, APP, DR, SIZE and GROWTH of firms. Among these variables, ICP and SIZE are highly significant to the profitability. Based on the key findings from this study it has been evident that managers can create a value for the enhancement of shareholder’s wealth by increasing the number of days inventory conversion to a maximum level and reducing the number of days accounts receivables and accounts payables to a reasonable level. This study recommend to the management in setting longer credit period policy for this sector to achieve higher profitability and they can maintain optimum high level of inventory in order to reduce the cost of possible breaks in the production process and loss of business due to the scarcity of inputs in production. Furthermore, firms can take short to pay their creditors in as much as they can build up strong relationships with these creditors. Also firm can get the sustainable competitive advantage by the effective and efficient utilization of the firm resources through the increment of the cash conversion cycle to its maximum. In so doing, the profitability of the firms is expected to increase.Item Impact of Working Capital Management on Financial Performance: Evidence from Plantation Sector Companies in Sri Lanka(Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Jeyanthini, S.; Rubika, M.Working capital management (WCM) is an integral part of financial management and management of working capital may have a significant impact on the profitability. This study explores the effect of working capital management on financial performance in Sri Lanka covering the period of 2009-2014, based on a sample drawn from the listed plantation companies. The sample comprises of 15 plantation companies listed on the Colombo stock exchange (CSE). In order to examine the effects of WCM on financial performance, the ROA and ROE were used as measures for financial performance while cash conversion cycle, current assets to total assets and current liabilities to total assets were used as measure of working capital management. Data of the selected firms which are listed in the CSE were obtained from their websites. Pearson’s correlation and regression analysis are used in drawing empirical evidence to answer the research questions of the study. The results depict that there is a significant and negative association between CCC and financial performance, measured by ROE (P = -0.041, < 0.05) and ROA (P= -0.048, < 0.05). Which indicate that, as the cash conversion cycle increases it would tend to reduce the financial performance of the company. The results derived from this research signify that the might able to raise their profits by diminishing the time period for the debtors and inventories so that, time period for payables would increase.Item The Impact of Working Capital Management on Profitability: Expolanka Case Study(Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Ismail, I.; Bandara, R.M.S.Commercial Organizations operate with the motive of improving shareholder wealth. Organizations are expected to manage their long term and short term financial resources to achieve the objective of shareholder profit maximization which is in line with maximization of wealth. In the backdrop of competitive landscape and scarcity of financial resources, the effective and efficient management of working capital is of paramount importance. This leads to companies giving priority in managing their working capital. The purpose of this study is to examine the Impact of Working Capital Management (WCM) on Profitability. To unearth answers for this question, 183 firm year observations covering 4 industry segments of Expolanka subsidiaries were investigated. The study covered five financial years from 2009 to 2014. Days sales outstanding, days payables outstanding, days inventory outstanding and cash conversions cycle were used as independent variables to measure WCM while gross profit margin, net profit margin, return on total assets and return on total equity were used as dependent variables to measure profitability. Pearson’s correlation analysis and regression analysis was used to analyst the relationship between these variables. According to results, it was evidenced that there is statistically significant positive relationship between Days sales outstanding and the Gross profit and Net Profit in Expolanka subsidiaries. Further there is statistically significant positive relationship between days payable outstanding and gross profit. Inventory days outstanding with gross profit has recorded statistically significant positive relationship. Cash conversion cycle has recorded significantly negative relationship with Gross profit and Net profit. Accordingly it was evidenced that shorter cash conversion cycle increases the profitability in Expolanka subsidiaries.Item Effectively maintain the working capital for manufacturing organization’s performance in Sri Lanka(Department of Accountancy, University of Kelaniya, 2015) Nishadi, W.W.D.M.Working capital management plays a significant role of manufacturing firms. Firms can increase it performance by managing it an effective way. The profitability, liquidity tradeoff is important because if working capital management is not given due considerations then the firms are fallen and faced bankruptcy (Abdul et.al, 2010). Firms can achieve optimal management of working capital by making the trade-off between profitability and liquidity. It promotes to satisfy the short term liquidity, Profitability and shareholder wealth (Daniel, Ambrose, 2013). There is a main issue facing by the organization is regarding to this is the management compromise to be made between low profitability and high liquidity. According to the economist Assaf Neto (2003), liquid assets are usually less profitable than fixed assets. The optimum level of working capital will increase the organization value (Mousavi and Jari (2012). This paper analyzes the impact of working capital management on manufacturing firm’s performance in Sri Lanka for the period of 2009 to 2014. For this purpose data are analysis from 100 manufacturing firms based on the annual reports during this time period. The variables will expect to measure by using Net Operating Profitability. In order to find out the relationship between different variables, regression model and correlation analysis are expected to examine the Working Capital behavior of the firm. This research expects to find out the efficient working capital policy to maintain and assess the negative relationship between the working capital and profitability.