Working Capital Management and Firm Profitability in the Textile Industry of Bangladesh

Muhammad Matin Khan, Md. Ismail Hossain Shagor, Abu Kalam and Md. Sojib Ahmed
Additional contact information
Muhammad Matin Khan: Department of Finance, University of Dhaka, Bangladesh
Md. Ismail Hossain Shagor: Department of Finance, University of Dhaka, Bangladesh
Abu Kalam: Department of Finance, University of Dhaka, Bangladesh
Md. Sojib Ahmed: Department of Finance, University of Dhaka, Bangladesh

International Journal of Science and Business, 2020, vol. 4, issue 7, 118-127

Abstract: This paper has been conducted to examine the connection between working capital management measured and profitability performance is measured. The study is conducted based on secondary data from annual reports of respective textile firms listed in DSE and DSE monthly reviews. From 2000 to 2018. The objective of the study is to find out the working capital devoted to the firms registered in the Dhaka stock exchange and find the connection of their performance and working capital capitalized in registered textile firms in DSE. To address this panel data, besides ratio and quartile study, Hausman test, variance inflation test, and fixed effect regression was done for testing all the hypotheses and the study result shows the inverse association with age and payment deferred period but a positive association with fixed asset turnover, cash conversion cycle, days sales outstanding, inventory conversion period, sponsor shareholdings and total assets. It also suggests to produce an effective policy must be produced for each company for each component of working capital. Besides, well-organized management and financing of working capital can upsurge the operating profit of a textile firm. Shorter cash conversion cycle, days sales outstanding, and the inventory conversion period can increase firms’ profit. These are some practical examples of working capital management.

Keywords: Working Capital Management; Firm Performance; Firm profitability; Textile Industry; Bangladesh (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://ijsab.com/wp-content/uploads/573.pdf (application/pdf)
https://ijsab.com/volume-4-issue-7/3102 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aif:journl:v:4:y:2020:i:7:p:118-127

Access Statistics for this article

International Journal of Science and Business is currently edited by Dr. Md Shamim Hossain

More articles in International Journal of Science and Business from IJSAB International
Bibliographic data for series maintained by Farjana Rahman ().