Symposia & Conferences
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Item The Impact of Asset Liability Management on Financial Performance Before and During the Crisis: Evidence from Licensed Finance Companies in Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Fernando, W. H. J. T.; Gunasekara, A. L.Introduction: This study critically assesses the impact of ALM on the financial performance of licensed finance companies in Sri Lanka, focusing on pre-economic crises and during the crisis periods. This research integrates measures of financial performance, which include ROE and ROA, while using capital adequacy ratio, CAR; non-performing loans ratio, NPLR; operational efficiency ratio, OER; earning diversification ratio, EDR; and liquid asset ratio and LAR, as main ALM variables to provide holistic understanding in the role of ALM in navigating through financial instability. Whereas firm size is a control variable, COVID-19 pandemic, economic crisis, and combined crises are dummy variables created to capture the temporal and contextual variations. Methodology: The research conducted on panel data collected from 22 licensed finance companies over the period from 2016 to 2023. Using a quantitative research approach, secondary data was obtained from the annual reports of the selected companies. This study applies panel regression, including random effects and robust error adjustments. Findings: The results have proved that ALM significantly impacts financial performance, with positive effects of CAR on profitability and negative pulls from both NPLR and OER, especially at more heightened levels of economic stress. Earnings diversification and liquidity were found to moderate these effects. The findings also depicted differentiated impacts of crises and the way COVID-19 heightens the challenge of deterioration in asset quality and inefficient operations. Conclusion: The study underlines that ALM is important for treading economic turmoil and for achieving the highest level of financial stability. Effective ALM strategies improve resilience, thus allowing finance companies to maintain stability and stakeholder trust during crises. This paper provides useful insights for both policymakers and practitioners on how strategic improvements in the ALM framework should be undertaken to help attain financial sustainability in volatile markets.Item The Impact of Financial Distress on Firm Performance: Evidence from Listed Companies in Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Madhushika, A. M. S. L.; Fernando, J. M. R.Introduction: Financial distress indicates the firm's risk of bankruptcy or financial instability. This study aims to identify the effect of financial distress on firms' performances during the economic crisis (2019–2023) and before the crisis (2015–2023) and analyze consumer services, capital goods, and food, beverage & tobacco sectors, which have the highest market capitalization. Methodology: This study collected data from 113 firms listed on the Colombo Stock Exchange under three sectors for a sample period of nine years, from 2015 to 2023. Using a quantitative approach, this study collected secondary data from the annual reports of the selected companies. The Altman Z-score was used as the explanatory variable to reflect the financial distress of the companies selected. Return on assets was used to measure the firm performance of the selected companies. Further, firm size and inflation rate were used as the control variables, and corporate governance was used as a moderate variable. Panel regression models were used in this study to analyze the data in STATA and SPSS software to test some hypotheses. Findings: The results of the study revealed that there were significant differences in financial distress before and during the crisis, with the compounded effects of financial distress and crisis periods further declining the firm's performance. Also, there are significant differences in financial distress levels between the three sectors, and corporate governance acts as a critical moderating factor, and its effectiveness varies across sectors. Conclusion: The findings of the study have practical implications for the strategic leaders of the three sectors. The study underscores the importance of early distress detection and adaptive governance practices to enhance firm performance, especially improving firm performance during economic crises.