Stock splits in Sri Lanka have a positive impact on the market, increasing liquidity and improving trading volume. Companies announcing stock splits are seen favorably by investors, leading to higher stock prices. The study looked at 40 stock splits from 2007 to 2010 and found that the size of the split is related to higher returns. This suggests that the market views stock split announcements as a positive signal about the company's future prospects. Overall, stock splits in Sri Lanka are seen as a good move for companies looking to improve market liquidity.