Working Capital Management and Profitability of Manufacturing Sector of Bangladesh: A Causal Relationship

Kashfia Haque Neelom and Suzona Asad
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Kashfia Haque Neelom: Lecturer, FBA, Eastern University, Dhaka, BANGLADESH
Suzona Asad: Lecturer, FBA, Eastern University, Dhaka, BANGLADESH

American Journal of Trade and Policy, 2017, vol. 4, issue 2, 47-54

Abstract: This paper explores the causal relationship between working capital management and corporate profitability of the manufacturing sector of Bangladesh. Sample data comprises 21 Dhaka Stock Exchange (DSE) listed companies of Bangladesh in four different industries from 2011 to 2015. A multivariable model has been developed to examine the association between profitability and working capital management. In the analysis, the current ratio and debt ratio have been used as control variables. The findings indicate a negative relationship between working capital management and profitability in the manufacturing sector and these four industries, and the significance level varies from industry to industry.

Keywords: Working capital management; Cash conversion cycle; ROA (search for similar items in EconPapers)
JEL-codes: O14 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:ris:ajotap:0075

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