Abstract:
Cash Conversion Cycle (CCC) is considered as an effective measure of firms’ working capital
management. It is also a prolific performance measure for assisting how well a company is
managing its working capital. This study aims to investigate the influence of CCC on the
financial performance of listed companies in Sri Lanka. The data was gathered by using
secondary sources, whereas Pearson’s correlation and multiple regression analysis were
employed to analyse the data for the period of 2011 to 2018. The results of the empirical finding
show that there is a strong negative influence of the cash conversion cycle on the financial
performance of listed companies. Therefore, the study suggests that managers of listed
companies can create a positive value for the shareholders by reducing the cash conversion
cycle to a possible minimum level and also accounts receivables should be kept at an optimal
level.
