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The purpose of this study is to examine the impact of an operating cycle on the firm's profitability in the material sector companies in Sri Lanka. The return on assets ratio (ROA) is used as a firm's profitability measure and measure the operating cycle effect by using the inventory holding period and receivable collection period. This study used panel data consisting of 12 material sector companies in Sri Lanka from 2015 to 2019. This research is conducted based on secondary data as well as data will be obtained from the annual reports and websites of the material sector companies in Sri Lanka STATA used to analyse data. The fixedeffect model was chosen to examine the impact of the operating cycle on the firm's profitability. For this research, frequency analysis, descriptive analysis, correlation analysis and simple regression analysis under univariate analysis and multiple regression analysis has been conducted. According to descriptive analysis, operating cycle effect and firm's profitability is high level in material companies of Sri Lanka. Based on the result of the correlation analysis, there is a significant relationship between variables and as per the regression analysis, there is a significant effect of the impact of the operating cycle on a firm's profitability in the material sector companies in Sri Lanka.