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Item A Comparative Analysis of the Impact of Firm-Specific and Macroeconomic Factors on Capital Structure Decisions: Evidence from Sri Lankan Retail and Utility Sector.(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Kajanika, P.; Perera, L. A. S.Introduction: This study investigates the influence of firm-specific factors, such as profitability, firm size, asset tangibility, liquidity, and dividends, and macroeconomic factors, including GDP growth, inflation, interest rates, and exchange rates, on capital structure decisions within Sri Lankan utilities and retail companies. Spanning the period from 2013 to 2023, this research compares the distinct financial dynamics of these two sectors to provide insights into their capital structure choices and the factors influencing these decisions. Methodology: A quantitative approach was employed using secondary data from 21 companies—15 in the retail sector and 6 in the utilities sector—listed on the Colombo Stock Exchange (CSE). Capital structure was measured through leverage ratios, while profitability, size, tangibility, and macroeconomic indicators were analyzed. Panel data regression techniques were applied to assess the relationships between the independent variables and capital structure. Sectoral comparisons provided further insight into variations. Findings: The findings indicate significant differences between sectors. In the utility sector, higher tangibility of assets strongly correlates with increased debt usage, reflecting the capital-intensive nature of this industry. Conversely, retail firms exhibited a higher reliance on equity, likely driven by their need for financial flexibility amidst competitive market dynamics. Macroeconomic factors such as GDP growth and inflation had varying impacts, with inflation negatively affecting retail firms but offering a mild hedging benefit to utility firms. Interest rates showed a uniformly negative influence on debt usage across both sectors. Conclusion: This study highlights the critical role of both firm-specific and macroeconomic factors in shaping the capital structure decisions of Sri Lankan utilities and retail companies. Utilities, with their stable cash flows, favor debt, whereas retail firms prioritize flexibility due to market volatility. Policymakers and corporate managers can use these findings to tailor strategies for optimizing capital structures, mitigating risks, and enhancing financial resilience in their respective industries. The study concludes that firm-specific factors such as tangibility, firm size, and liquidity, along with the macroeconomic factor of interest rates, are the most influential determinants of capital structure. Utilities Sector: Tangibility and firm size are key drivers, reflecting the sector's reliance on debt financing for infrastructure development. Retail Sector: Liquidity and profitability are critical, underscoring the need for financial flexibility in a competitive market. Macroeconomic factors, especially interest rates and inflation, further shape these decisions by altering the cost and attractiveness of debt. Firms and policymakers should consider these findings to optimize capital structure strategies, enhance resilience to economic fluctuations, and support sustainable growth in their respective industries.Item THE VALUE RELEVANCE OF FINANCIAL STATEMENTS?INFORMATION: WITH SPECIAL REFERENCE TO THE LISTED COMPANIES IN COLOMBO STOCK EXCHANGE(2010) Karunarathne, W.V.A.D.; Rajapakse, R.M.D.A.P.Investors and other interest parties of accounting make use of financial statements and disclosures, among other publically available information, to assess the risk and value of firm when taking the investment decisions. According to Sushma Vishnani, Bhupesh Kr. Shah (2008) ?Value relevance? implies ability of the financial information contained in the financial statements to explain the stock market measures. The purpose of this paper is to investigate the value relevance of financial information that extracted from financial statement directly or indirectly. Especially the study considered the value relevance of earnings and cash flows in stock prices. In addition, the study pays attention on the firm size effect on value relevance. A hundred (100) companies have been selected to the sample representing the all the business sectors except banking, finance and insurance over a period of 5 years from 2004 to 2008 listed in the Colombo Stock Exchange (CSE) and the pooled time regression method is used to analyze the data. Return model as well as Price model was used to determine the value relevance of financial statements? information. It revealed that the value relevance of accounting information under the Price model has more explanatory power than Return Model. The empirical results of the study indicate that Earning Per Share (EPS) is the most value relevant variable in this study and it is significant at 0.01 level. Regression of earnings, book value and cash flows on stock price results indicate that the cash flows from investment is another value relevance variables at 0.01 significant level. When running stepwise regression to determine the best model of value relevance, EPS is the only value relevant variable for determining stock prices.