Optimizing cash management boosts firm value for Sri Lankan businesses.
Working capital management, which involves handling cash, inventory, and accounts receivable, impacts a company's short-term success. A study on Sri Lankan firms over five years found that managing the cash conversion cycle, days of accounts payable, and firm size positively influences firm value. However, days of accounts receivable and inventory have a negative impact. This suggests that Sri Lankan companies should focus on improving their cash conversion cycle to enhance their firm value.