Open AccessWorking Capital Management (WCM) and Firm Performance in Emerging Markets: A Case of Bangladesh
Author(s) -
Rafiqul Bhuyan,
Mohammad Sogir Hossain Khandoker,
Noshin Tasneem,
Mahjuja Taznin
Publication year - 2021
Publication title -
accounting and finance research
Language(s) - English
Resource type - Journals
eISSN - 1927-5994
pISSN - 1927-5986
DOI - 10.5430/afr.v10n1p36
Subject(s) - working capital , return on assets , current ratio , current asset , return on capital employed , business , profitability index , asset turnover , debt ratio , stock exchange , return on capital , monetary economics , asset (computer security) , current liability , return on equity , finance , economics , debt , financial capital , microeconomics , capital formation , profit (economics) , computer security , computer science
We examine the impact of efficient working capital management on market value and profitability. Using secondary data on selected firms from Dhaka Stock Exchange we explore the effects of various working capital components (i.e. cash conversion cycle (CCC), current ratio (CR), current asset to total asset ratio (CATAR), current liabilities to total asset ratio (CLTAR), debt to asset ratio (DTAR), siz,e and growth) to the firm’s performance by looking firm’s value i.e. Tobin’s Q (TQ) and profitability i.e. return on asset (ROA) and return on invested capital (ROIC). Our results show that, for both food and overall manufacturing sectors, there is a significant association between working capital variables and firm’s value & return on assets, but an insignificant association with return on invested capital.