Abstract:
The study aims to examine the impact of the cash conversion cycle on the profitability of SMEs in Batticaloa district. A sample of 100 SMEs was selected from Batticaloa District based on stratified random sampling method. Descriptive statistics was used to represent the responses from the respondents of SMEs and regression analysis was also used in this study in order to examine the impact of cash conversion cycle and inventory holding period on the profitability of SMEs. The results depicted that there is a significant impact of cash conversion cycle and inventory holding period on the profitability of the SMEs in Batticaloa. These results emphasize the importance of the cash conversion cycle to the function of SMEs. In order to manage the cash conversion cycle, it is recommended to SMEs have various initiatives as it is evident that SMEs are one of the key contributors to developing economies
