Cash Position and Profitability of Telecommunication Sector in Srilanka

Abstract

This study has analyzed cash position and profitability among listed telecommunication firms in Sri Lanka over a period from 2005 -2011. The objective of the study was to establish the causality that exists between the profitability and cash position. This was prompted by the need to unravel the mystery on whether profits are driven by cash position or the vice versa. The study was carried out by analyzing the two firms' profit measured by return on assets and return on equity as the dependent variable and the cash position as liquidity measure in relation to the sales, total assets and current liabilities as the independent variables. Pearson correlation analysis was used to find out the relationships between these variables and regression analysis was used to find out the impact of cash position on profitability. SPSS was utilized to support the analysis and to provide a basis for the conclusions drawn.

Panel Data Analysis of Profitability Determinants: Evidence from Indian Telecom Companies

“…In this section, the related literature is reviewed in order to find out the deter- profit, productivity, and size play a major role in explaining profitability, whereas the effect of industry affiliation is trivial. Reference [9], using the sample of 28 manufacturing companies for the period of 2007-2011, found that determinants of corporate governance are not correlated to the performance measures of the organization. Reference [10] identified positive relation between profitability and leverage which is in consensus with trade-off theory.…”

Influence of Cashflow Activities on Financial Performance of Commercial Banks in Kenya: Case of Kakamega County

“…Kenya's investment rate was below 25% of GDP during 2005 -2014, indicating the lowest investment rate among the peer group, with the exceptions of Cambodia and Pakistan (World Bank, 2016). From this analysis, banking industry in Kenya seems to be experiencing performance fluctuations indicating negative financial performance (Khaliq, Hussein, Altarturi, Mohd, & Thaker, 2014). A lot of research has been done on cash flow activities and financial performance Mung'o , (2010) analyzed the input of cash flow on financial performance of Kenyan commercial banks for the period 2005-2009; Zhou et al (2012) looked at the link between cash flow activity and profitability as evidenced from listed Real Estates Companies in China; Binglar et al (2014) on cash flow and corporate performance: Food and beverage companies in Nigeria; Watson (2005) looked at a variety of earnings and cash flow activities measures of profitability of a firm and stock returns; Parsian & Amir (2013) carried a research on the effect of operating cash on financial performance in Tehran stock exchange; Nwanyanwu (2015) researched on the relationship between operating cash flow activities and organization profitability in the hospitality and print media industry in Nigeria; Rehaman (2017) analyzed investment cash flow on financial performance in Pakistan firm.…”

Pengaruh Capital Structure Dan Working Capital Management Terhadap Profitabilitas

“…Kemampuan perusahaan untuk menghasilkan laba akan dapat menarik para investor untuk menanamkan dananya guna memperluas usahanya, sebaliknya tingkat profitabilitas yang rendah akan menyebabkan para investor menarik dananya. A profitable firms can issue debt at low rates of interest since they are seen as less risky by the creditors; furthermore, profitable firms are able to generate large earnings use a lesser amount of debt capital than firms that make little profit" (Titman and Wessels, 1988;Mazur, 2007;Rajan and Zingales, 1995;Abor, 2005 (Velnampy, 2013).…”

“…"The capital structure of a firm is very important since it is related to the ability of the firm to meet the needs of its stakeholders." (Velnampy, 2013).…”