Working Capital Management and Firm Profitability in the Textile Industry of Bangladesh Muhammad Matin Khan, Md. Ismail Hossain Shagor, Abu Kalam & Md. Sojib Ahmed

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

Author (s)

Muhammad Matin Khan, Md. Ismail Hossain Shagor, Abu Kalam  & Md. Sojib Ahmed

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.

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Title: Working Capital Management and Firm Profitability in the Textile Industry of Bangladesh
Author: Muhammad Matin Khan, Md. Ismail Hossain Shagor, Abu Kalam  & Md. Sojib Ahmed
Journal Name: International Journal of Science and Business
Website: ijsab.com
ISSN: ISSN 2520-4750 (Online), ISSN 2521-3040 (Print)
DOI: https://doi.org/10.5281/zenodo.3935735
Media: Online
Volume: 4
Issue: 7
Acceptance Date: 05/07/2020
Date of Publication: 08/07/2020
PDF URL: https://ijsab.com/wp-content/uploads/573.pdf
Free download: Available
Page: 118-127
First Page: 118
Last Page: 127
Paper Type: Research Paper
Current Status: Published

Cite This Article:

Muhammad Matin Khan, Md. Ismail Hossain Shagor & Abu Kalam (2020). Working Capital Management and Firm Profitability in the Textile Industry of Bangladesh. International Journal of Science and Business, 4(7), 118-127. doi: https://doi.org/ 10.5281/zenodo.3935735

Retrieved from https://ijsab.com/wp-content/uploads/573.pdf

 

 

About Author (s)

Muhammad Matin Khan (corresponding author) MBA, Department of Finance, University of Dhaka, Bangladesh.

Md. Ismail Hossain Shagor, MBA, Department of Finance, University of Dhaka, Bangladesh.

Abu Kalam, MBA, Department of Finance, University of Dhaka, Bangladesh.

Md. Sojib Ahmed, MBA, Department of Finance, University of Dhaka, Bangladesh.

 

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DOI: https://doi.org/10.5281/zenodo.3935735

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