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

Author

Listed:
  • Neelom, Kashfia Haque

    (Lecturer, FBA, Eastern University, Dhaka, BANGLADESH)

  • Asad, Suzona

    (Lecturer, FBA, Eastern University, Dhaka, BANGLADESH)

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.

Suggested Citation

  • Neelom, Kashfia Haque & Asad, Suzona, 2017. "Working Capital Management and Profitability of Manufacturing Sector of Bangladesh: A Causal Relationship," American Journal of Trade and Policy, Asian Business Consortium, vol. 4(2), pages 47-54.
    • Handle: RePEc:ris:ajotap:0075
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    More about this item

    Keywords

    Working capital management; Cash conversion cycle; ROA;
    All these keywords.

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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