This project focused on liquidity. It manages the mental performance of a manufacturing company. The aim of this study is to help manufacturing companies to adopt every spared policy on administration of liquidity assets and closely monitor these policies for optimality. It was firmed that the inadequate current assets can jeopardize the profitability and survival of the survival of the company and firms must be in liabilities to be in business. Structured questionnaire and personal interview were used covering the aspect of the hypothesis is put forward for top management, interpreted and analyzed by using tables and average method from the certain suggestion were made not on the down find on stock, instead, they should invest on marketable securities are easily collected. Readers are hereby encouraged to study this re[ort for details.   

Liquidity management and profitability are very important issues in the growth and survival of business and the ability to handle the trade-off between the two a source of concern for financial managers.The study is also aimed at finding the effect of changes in liquidity levels on profitability of manufacturing companies in Sri Lanka. The study covered listed manufacturing companies in Sri Lanka over a period of past 5 years from 2008 to 2012. Correlation and regression analysis were used in the analysis and findings suggest that there is a significant relationship exists between liquidity and profitability among the listed manufacturing companies in Sri Lanka. Suggested that Inventory Sales Period (ISP), Current Ratio (CR)and are significantly correlated with Return on Asset (ROA), Operating Cash Flow Ratio (OCFR)are significantly correlated with Return on Equity (ROE) 5 percent level of significance. At the same time ISP and OCFR also are significantly correlated with ROA, Creditors Payment Period (CPP) also is significantly correlated with ROE at 1 percent level of significance.


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