Impact of Working Capital Management on Profitability: A Study on Textile Companies of Bangladesh

Ahmed et al., J Bus Fin Aff 2017, 6:4 DOI: 10.4172/2167-0234.1000292

7 Pages Posted: 29 Apr 2018

See all articles by Sarwar Uddin Ahmed

Sarwar Uddin Ahmed

Independent University, Bangladesh (IUB)

Naheem Mahtab

Independent University, Bangladesh (IUB)

M. Nazmul Islam

University of Malaya, Asia Europe Institute (AEI)

Mohammad Abdullah

Independent University, Bangladesh (IUB)

Date Written: October 5, 2017

Abstract

Management of short-term assets and liabilities play vital role in generating profit in business sector. In the light of that, textile sector from all over the world is also emphasizing on to maintain optimal working capital to generate more profit. Researchers and practitioners around the world have done lot of work on how to maintain working capital in optimal level. Similarly, in Bangladesh, textile sector has concentrated to ensure efficient working capital management. But inadequate research work has been done on working capital management in textile companies of Bangladesh. On this background, the objective of this study is to examine the impact of different components of working capital management on profitability of the Bangladeshi textile companies. To examine that authors have used 8 (eight) years data from the time period of 2007-2014 of 22 textile companies listed in Dhaka Stock Exchange (DSE) and logistic regression has used to analyze the data. The findings of the study showed that, there is statistically significant relationship between working capital management and profitability of the Bangladeshi textile companies. More specifically, this study revealed that Current ratio and Current liabilities to total asset has most significant impact on profitability of textile companies in Bangladesh.

Keywords: Working capital management; Profitability; Textile sector; Bangladesh

Suggested Citation

Ahmed, Sarwar Uddin and Mahtab, Naheem and Islam, M. Nazmul and Abdullah, Mohammad, Impact of Working Capital Management on Profitability: A Study on Textile Companies of Bangladesh (October 5, 2017). Ahmed et al., J Bus Fin Aff 2017, 6:4 DOI: 10.4172/2167-0234.1000292, Available at SSRN: https://ssrn.com/abstract=3160462

Sarwar Uddin Ahmed

Independent University, Bangladesh (IUB) ( email )

Plot 16 Block B, Aftabuddin Ahmed Road Bashundhara
Bashundhara R/A
Dhaka, 1229
Bangladesh

HOME PAGE: http://www.sb.iub.edu.bd/

Naheem Mahtab

Independent University, Bangladesh (IUB) ( email )

Plot - 16, Block - B, Aftabuddin Ahmed Road
Bashundhara R/A
Dhaka, 1212
Bangladesh

M. Nazmul Islam (Contact Author)

University of Malaya, Asia Europe Institute (AEI) ( email )

Malaysia

Mohammad Abdullah

Independent University, Bangladesh (IUB) ( email )

Plot - 16, Block - B, Aftabuddin Ahmed Road
Bashundhara R/A
Dhaka, 1212
Bangladesh

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
209
Abstract Views
761
rank
174,641
PlumX Metrics