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Working Capital Management Practices in


Selected Listed Companies of Bangladesh

Article June 2014

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Working Capital Management Practices in Selected Listed
Companies of Bangladesh

Dr. Md. Muzammel Hoque1


Dr. Md. Abu Taher2
Anupam Kumar Das3

Abstract

Managing assets and liabilities is one of the most important jobs for business managers and
accountants now a day. Good working capital management will secure a companys financial stature
and help build its business. The study is based on 38 listed companies of Dhaka Stock Exchange and
Chittagong Stock Exchange during 2004 to 2008. The main objective of the study is to evaluate the
structure of working capital and suggest a prudent framework for making working capital management
smooth and effective in the sample companies. The main findings of the study are as regards the
distribution of current assets into different uses, it is seen that the share of inventories is the largest
followed by the share of accounts receivables and cash. But, across the study period, accounts
receivables have shown slow and steady decline; whereas the cash and inventories have shown an
increasing trend. The largest share of inventories in current assets indicates the less qualitative aspect
of inventories. In the policy implications of the study, the important suggestions covers promulgate
application of budgetary control and responsibility accounting techniques. The implementation of these
suggestions is expected to improve the existing working capital structure of the exemplary companies.

Keywords: Working Capital Management (WCM), Current Assets (CAs), Total Assets (TAs),
Account Receivables (A/Rs).

1. Introduction
The working capital structure indicates two important aspects: liquidity as well as
profitability of a company. This implies that the larger the current assets to total assets
ratio, the higher the liquidity, and the lower the profitability; and vice-versa. In this
case, working capital management has to be very much careful in deciding and
maintaining working capital structure across the operating years. But WCS may
significantly vary from manufacturing to service rendering companies. So, the study
has undertaken only 38 listed manufacturing companies of six sectors such as cement,
food, textile, pharmaceutical, engineering, and leather of Bangladesh. The study has
employed some important financial ratios such as ratio of current assets to total assets,
ratio of cash to total assets, ratio of receivables to total assets, ratio of inventories to
total assets, cash to current asset ratios, ratio of receivables to current assets, ratio of
inventories to current assets for evaluation of working capital structures.

Working Capital is the portion of an enterprises total capital which is employed in


short-term operations, that is current assets. A typical list of these assets in order of
liquidity includes cash in hand and at bank, short-term investments, payments in
advance, accounts receivable, raw materials inventory, inventory of goods in process,
and finished goods inventory (Clarkson & Elliott, 1972, p.98). Cash being the most
liquid of all current assets is at the top of the list and inventories being the least liquid
are recorded at the end. The management of all these current assets assumes greater
1
Associate Professor, FBA, USTC, Foys Lake, Chittagong, Bangladesh. Email:engrmuzammel@gmail.com
2
Dean & Professor, FBA, University of Chittagong, Bangladesh. Email:taher500_cumgt@yahoo.com
3
Lecturer, Department of Management Studies, FBA, University of Chittagong, Email: dasanupam@cu.ac.bd

1
importance because the sum total of investment in current assets forms over one-half
of an enterprises total assets (Charles, Kroncke, Nemmers, & Gruneweld, 1978,
p.108). The management of current assets also requires a lot of time and involvement
of many people (Charles et al., 1978, p.108). Besides, the level of current assets of an
enterprise has an important effect on its risk and return. As the size of current assets
increases, both the enterprises risk and return would decrease and vice versa
(Gitman, 1976, p.17). Since the current assets affect the risk-return tradeoff to be
achieved by the enterprise, the study of their structure appears to be one of the
important areas of investigation on working capital management. This paper describes
the working capital structure in the selected enterprises.

2. Literature Review
Most firms had a large amount of cash invested in working capital. It can, therefore,
be expected that the way in which working capital is managed will have a significant
impact on profitability of those firms (Deloof, 2003). Using correlation and regression
analysis, he found a significant negative relationship between gross operating income
and the number of days accounts receivable, inventories and accounts payable of
selected firms. On the basis of these results, he suggested that managers could create
value for their shareholders by reducing the number of days accounts receivable and
inventories to a reasonable minimum. The negative relationship between accounts
payable and profitability is consistent with the view that less profitable firms wait
longer to pay their bills.

Quayyum (2012) investigate the relationship between working capital management


and profitability of manufacturing companies. In this study, he has selected the
companies enlisted with the DSE and the analysis covers a time period from year
2005 to 2007. The study emphasized to figure out if there is statistically significant
relationship between the profitability and working capital management and help
explain the necessity of firms optimizing their level of working capital management
efficiency and in that way management takes productive actions to maximize their
profitability. The result of this study clearly has showed that except for food industry
all other selected industries have a significant level of relationship between the
profitability indices and various working capital components. This paper also has
showed that the significance level of relationship varies from industry to industry.

An empirical research by Jain and Yadav (2000) conducted on the comparative


current assets management practices of corporate enterprises in India, Singapore and
Thailand. The sample consisted of 238 Indian, 86 Singaporean and 126 Thai
companies. It was found that the large majority of the sample companies in India as
well as Singapore and Thailand had singled out bank overdraft/cash credit as the
major source of dealing with cash deficit situations. The survey also found the
multiple ways in which surplus cash was used by the corporate firms from the sample
countries. Indian corporate firms followed the practice of deploying excess cash
primarily by investing in short-term marketable securities, retiring short-term debt and
making deposits with bank for short period. Whereas, deposit with bank and retiring
short-term debts were the preferred outlets for Singapore corporate enterprises and
Thai firms. Most of the corporate firms in India generally offered cash discount
facility to debtors, while their counterparts from Singapore and Thailand (all) did not
follow the policy of offering discount to their debtors. Two-thirds of corporate firms

2
in India charged penal interest on overdues, whereas majority of the firms both in
Singapore and Thailand did not charge any penal interest on overdue accounts.

Muqtader and Huq (1993) in their study critically analyzed the planning for working
capital requirements, structural allocation of working capital into its various
components, financing of working capital, testing adequacy or otherwise of working
capital and control of working capital. The study was limited to 5 sample enterprises
located in Chittagong Zone. The empirical analysis of the study was confined to the
financial years 1984 to 1989. Evidence mentioned that working capital decision is of
major importance to internal and external analysis because of its close relationship
with the current day to day operation of a business. They studied that a firms
profitability is determined in part by its working capital decision. That is, when
working capital varies in relation to sales without a corresponding change in
production, the profit position is affected. Moreover, if the flow of funds created by
the movement of working capital through the various business processes is
interrupted, the turnover of working capital is decreased, as is the rate of return on
investment. They have found in their study that there was poor and inadequate
planning of working capital due to non-formulation of goals for working capital,
inaccurate estimation of working capital requirement, non-application of the
important techniques of working capital planning. Finally they have suggested that the
improvement in the working capital decision will lead to better position and use of net
working capital and in turn return on investment and material productivity in the
sample mills.

The study made by Islam (2000) examined the overall working capital management
consisting of cash, inventory and receivables of sugar industry in Bangladesh. He
analyzed the possible factors affecting the financial management of the industry.
Besides, the financing of working capital, liquidity and profitability of the industry
were also examined. To pursue the study, six mills have been selected as sample from
fifteen operating sugar mills of Bangladesh. The study covered the period ranging
from 1987/1988 to 1996/1997. The major findings of the study were the sugar
industry of Bangladesh is running with negative net working capital at Tk. 1407.00
lacs on an average of the sample mills during the study period. The industry has
become unprofitable to run, as the profit margin is negative, the liquid item of
working capital i.e., the cash is insufficient both in terms of operational requirement
and solvency, the industry is working with overstocking. Both the turnover and
conversion period of inventory is far from satisfactory. He also found that the
receivables are the second largest part of current assets, which are Tk. 801.00 lacs on
an average. The average turnover and collection periods of receivables are not
satisfactory. Finally, he made comment that the working capital management of sugar
industry in Bangladesh is considered unsatisfactory.

The major concern of financial manager is the financing and management of current
assets which has direct relation to profit performance and smooth and efficient
operation of a firm (Ahmed, 1996). In fact, management of current asset becomes
more important where current asset comprises major share of total investment. The
main objective of the study was to examine the impact of management of current asset
on the performance of the sample mills. The study was based on 3 chemical factories
and 3 paper mills. The empirical analysis of the data relating to the operating period
of the samples was limited to the financial year 1985-1992. In the sample enterprises,

3
share of current assets to total assets and net sales accounted for 60.2% and 1.3%
respectively. But the crux of the problem was that the management of current asset
was found poor. In some cases there were over investment and in some cases, there
were under investment. Imbalance was observed among different elements of current
asset which, however, can be attributed significantly to nature of industry, source of
raw material, market condition, and availability of fund, collection period and the like.
Further, sources of finance of current assets were found to vary from enterprise to
enterprise. Bank loan of the average for sample enterprises accounted for 12.5%to
50.6% and trade credit accounted for 19%to 58.1%. On an average, current asset
management in terms of structure i.e., element-wise composition, turnover, financing,
etc. were found unsatisfactory which to a significant extent adversely affected profit
performance, productivity and capacity utilization. But as profit performance,
productivity and capacity utilization were affected by other factors too, the main
impact in this regard cannot be attributed to current asset management. It is not co
aggression to mention here that current asset management suffers from various flaws
in its various aspects. Finally, the researcher suggested that an efficient management
can improve overall performance of the sample mills to a significant extent and this
area warrants adequate attention from the concerned authorities.

Ahmad (1991) analyzed that the management of cash is particularly important


because it brings into sharp focus the trade-off between risk and return. The main
objective of the study was to critically evaluate the practices of cash management in
private manufacturing enterprises. The study emphasized on primary data and has
been kept limited to 10 (ten) private manufacturing enterprises situated in Chittagong.
He mentioned that the sample enterprises are always faced with severe liquidity
problem, which is evident from the observation that the percentage of cash and bank
balances to current asset varies from 0.85 to 7.30, which is much below the standard
norm of 10 percent. The study revealed that the cash management practices of the
sample units are not sound. But the position can be improved by introducing the
recognized techniques of cash planning and control. He presented a proper devised
cash forecast provides invaluable information to the management by giving advance
notice of (i) how much cash will probably be needed to realize a given short period
objective; (ii) how much cash it can expect from current income to meet these needs;
(iii) how much cash balance will be increased or decreased by these flows; and (iv)
how much financing may be needed to meet expected deficits from operations or how
much cash surplus will be available for short term deployment. It has been found that
the pattern of collection from debtors and terms of accounts payable occupy a
significant position in cash forecasting. Finally, he suggested variance analysis by
means of cash budget which exhibits the differences between actual and projected
cash flow leading to the finding out of causes of differences and taking corrective
action.

3. Objectives
The main objective of the study is:
i) To critically evaluate the working capital structure of some selected listed
companies in Bangladesh
ii) To suggest a prudent framework for making working capital planning and
control smooth and effective in the sample companies.

4
4. Research Method

4.1 Sampling Design

The study has examined some companies enlisted with both DSE and CSE. The
researcher has selected 50 sample companies randomly out of population size of 104
companies belong to prominent industrial sectors. Researcher has tried hard to
conduct interviews of concerned officials of all 50 sample listed companies but has
been successful in conducting interview of only 38 sample companies. So, the success
rate is 76%.

4.2 Data Collection

The study is both theoretical and empirical ones. Both primary and secondary data
have been used in the study. In order to collect primary data, the researchers have
prepared a structured questionnaire composed of open-ended response questions and
fixed-alternative questions. The researchers have adopted direct approach to select
respondents to collect primary data. In this case, researcher has made an appointment
with the GM (Finance) / Director (Finance) / Manager (Finance) of different sample
companies as the case may be. Accordingly, researcher has gone to the office of
sample companies and filled the questionnaire on the basis of direct interview of
concerned executive. Of course, the financial data of the concerned samples (if
required) had been filled by respective executive of concerned sample companies.
Secondary data for the study have been collected from the following published
sources: Annual Reports of the selected companies, Statistical Year Book, Bangladesh
Economic Survey, and Related Websites. In addition, some unpublished data were
collected from official records of sample companies.

4.3 Data Analysis

The collected data has been tabulated manually and analyzed by using different
relevant financial techniques.

5.0 Findings
The findings of the study have been discussed under the following heads:

5.1 Used Key Formulas

Different formulas have used in the study to analyse the working capital structure of
sample companies which are shown as follows:

Current Assets (CAs) to Total Assets (TAs) = (Current Assets Total Assets) x 100
Cash to TAs = (Cash TAs) x 100
Account Receivables (A/Rs) to TAs = (Receivable TAs) x 100
Inventories to TAs = (Inventories TAs) X 100
Cash to CAs = (Cash CAs) X 100
A/Rs to CAs = (Receivables CAs) X 100
Inventories to CAs = (Inventories CAs) X 100

5
5.2 Assessment of Working Capital Structure (WCS)

The study has employed financial ratios of CAs to TAs, Cash to TAs, A/Rs to TAs,
Inventories to TAs, Cash to CAs, A/Rs to CAs, and Inventories to CAs in order to
unearth the asset structure of the sample companies under study.

5. 2.1 Analysis of WCS in terms of CAs to TAs

Table 1: Ratio of CAs to TAs


Industry
2004 2005 2006 2007 2008
Sector Average
in %
Cement 31.68 36.70 38.91 42.67 51.65 40.32
Food 41.69 46.75 45.89 45.09 48.10 45.51
Textile 50.23 45.60 47.12 47.12 50.53 48.12
Pharmaceutical 59.45 63.05 61.34 61.03 61.84 61.34
Engineering 67.98 69.14 69.09 63.20 59.09 65.70
Leather 68.32 68.83 68.59 73.25 73.42 70.08
Sectoral Average 53.23 54.68 55.16 55.39 57.44 55.18
Source: Annual Reports 2003-2008 Note: Data have been compiled by the researchers

The analysis of Table 1 indicates that from the view point of CAs to TAs, Leather
sector occupies the highest position followed by Engineering, Pharmaceutical and so
on. This signifies that these three sectors have been overwhelmed with CAs to TAs in
terms of percentage. It has been observed that the ratios of CAs to TAs, of two sectors
Cement, and Food have been found rising on average but those of other sectors-
Textile, Pharmaceutical, Engineering and Leather have been found moving ups and
downs across the periods under study. These indicate that size of CAs in TAs in case
of Cement, and Food are getting larger which might have resulted in lowering
profitability of these two sectors. The proportion of CAs to TAs in case of other
sectors are significantly rising and falling across the study periods. These rise and fall
in asset structure implies the lack of consistency of WCM of sample companies and
sectors.

5. 2.2 Analysis of WCS in terms of Cash to TAs

Table 2: Ratio of Cash to TAs

Industry
2004 2005 2006 2007 2008
Sector Average
in %
Cement 2.25 1.89 2.40 5.27 4.71 3.30
Food 1.57 3.62 2.42 2.99 1.69 2.46
Textile 3.17 3.21 2.34 2.70 3.99 3.08
Pharmaceutical 8.19 7.98 4.53 3.64 4.88 5.84
Engineering 2.65 2.42 2.18 2.09 2.55 2.38
Leather 2.16 4.09 5.40 3.97 2.73 3.67
Sectorial Average 3.33 3.87 3.21 3.44 3.42 3.46
Source: Annual Reports 2003-2008 Note: Data have been compiled by the researchers

From the view point of Cash to TAs, the analysis of Table 2 indicates that
Pharmaceutical sector occupies the highest position followed by Leather, Cement and

6
so on. This implies that these three sectors have been overwhelmed with Cash to TAs
in terms of percentage. It has been found that the ratios of Cash to TAs, of all the
sectors, Cement, Food, Textile, Pharmaceutical, Engineering and Leather have been
found to be moving ups and downs across the periods under study. The proportion of
cash to TAs in the case of all sectors are significantly rising and falling across the
study periods. These rise and fall in assets structure implies the lack of stability of
WCM of sample companies and sectors.

5.2.3. Analysis of WCS in terms of A/Rs to TAs

Table 3: Ratio of Receivables to TAs


Industry
2004 2005 2006 2007 2008
Sector Average
in %
Cement 9.14 10.99 11.67 11.28 8.81 10.38
Food 9.94 10.04 8.60 7.06 8.83 8.89
Textile 22.71 17.33 18.74 20.41 18.79 19.60
Pharmaceutical 10.07 12.62 8.13 10.37 6.36 9.51
Engineering 14.72 13.14 16.81 14.31 12.68 14.33
Leather 9.53 9.70 12.96 14.75 15.17 12.42
Sectoral Average 12.68 12.30 12.82 13.03 11.77 12.52
Source: Annual Reports 2003-2008 Note: Data have been compiled by the researchers

The analysis of Table 3 shows that from the perspective of Receivables to TAs,
Textile sector occupies the highest position followed by Engineering, Leather and so
on. This denotes that these three sectors have been overwhelmed with Receivables to
TAs in terms of percentage. It has been observed that the ratios of Receivables to TAs
of Leather sector has been found to be rising on an average but those of other sectors-
Cement, Food, Textile, Pharmaceutical and Engineering have been found moving ups
and down across the periods under study. These indicate that size of receivables in
TAs in the case of Leather is getting larger which resulted in liberal credit policy of
this sector. The proportion of receivable to TAs in the case of other sectors are
significantly rising and falling across the study periods. These rise and fall in assets
structure are meaning the lack of uniformity of WCM of sample companies and
sectors.

5.2.4. Analysis of WCS in terms of Inventories to TAs

Table 4: Ratio of Inventories to TAs


Industry
2004 2005 2006 2007 2008
Sector Average
in %
Cement 14.28 16.05 15.39 16.22 20.08 16.40
Food 25.05 26.42 28.60 26.64 27.03 26.75
Textile 20.26 21.79 23.16 21.70 24.95 22.37
Pharmaceutical 22.76 21.03 26.22 24.84 26.50 24.27
Engineering 33.41 35.14 33.59 30.88 28.69 32.34
Leather 49.10 46.91 43.77 45.67 47.11 46.51
Sectoral Average 27.48 27.89 28.45 27.66 29.06 28.11
Source: Annual Reports 2003-2008 Note: Data have been compiled by the researchers

7
The analysis of Table 4 indicates that from the view point of Inventories to TAs,
Leather sector occupies the highest position followed by Engineering, Food and so on.
This signifies that these three sectors have been overwhelmed with Inventories to TAs
in terms of percentage. It has been found that the ratio of Inventories to TAs of
Cement sector has been found rising on an average and the ratio of Inventories to TAs
of Engineering has been found falling on an average. But those of other sectors- Food,
Textile, Pharmaceutical, and Leather have been found moving ups and downs across
the periods under study. These indicate that size of inventories in TAs in case of
Cement sector is getting larger which resulted in lack of finance in this sector. On the
other hand, the size of inventories in TAs in case of Engineering sector is getting
smaller which resulted in enhancing the profitability of this sector .The proportion of
inventories to TAs in case of other sectors are significantly rising and falling across
the study periods. These rise and fall in assets structure implies the lack of
consistency of WCM of sample companies and sectors.

5.2.5. Analysis of WCS in terms of Cash to CAs

Table 5: Ratio of Cash to CAs

Industry
2004 2005 2006 2007 2008
Sector Average
in %
Cement 6.62 4.70 6.04 12.52 9.82 7.94
Food 4.64 10.64 4.42 7.48 5.70 6.58
Textile 6.12 6.26 4.11 4.85 6.40 5.55
Pharmaceutical 13.90 12.75 8.78 7.85 10.44 10.74
Engineering 3.72 3.85 3.59 3.40 3.96 3.70
Leather 2.77 5.19 6.65 5.31 3.37 4.66
Sectoral Average 6.30 7.23 5.60 6.90 6.62 6.53
Source: Annual Reports 2003-2008 Note: Data have been compiled by the researchers

From the perspective of Cash to CAs, the investigation of Table 5 shows that
Pharmaceutical sector occupies the highest position followed by Cement, Food and so
on. This means that these three sectors have been overwhelmed with Cash to CAs in
terms of percentage. It has been observed that only the ratios of Cash to CAs of
Pharmaceutical sector has been found falling on an average and the ratios of Cash to
CAs of Engineering sector has been found to be almost consistent in the study period.
But those of other sectors- Cement, Food, Textile, and Leather have been found
moving ups and downs across the periods under study. These indicate that the size of
cash in CAs in the case of Pharmaceutical sector is getting smaller during the study
period which resulted in lowering the liquidity of this sector. The proportion of cash
to CAs in case of other sectors except Engineering are significantly raising and falling
across the study periods. These rise and fall in assets structures are implying the lack
of stability of WCM of sample companies and sectors.

8
5.2.6 Analysis of WCS in terms of A/Rs to CAs

Table 6: Ratio of Receivables to CAs

Industry
2004 2005 2006 2007 2008
Sector Average
in %
Cement 29.46 33.69 30.80 29.99 14.98 27.78
Food 23.75 23.07 19.37 15.53 18.13 19.97
Textile 42.18 36.31 37.83 38.84 34.84 38.00
Pharmaceutical 15.85 18.40 13.23 16.03 10.65 14.83
Engineering 21.25 18.93 23.26 24.70 24.05 22.44
Leather 15.56 16.36 20.37 21.70 22.02 19.20
Sectoral Average 24.68 24.46 24.14 24.46 20.78 23.70
Source: Annual Reports 2003-2008 Note: Data have been compiled by the researchers

The study of Table 6 indicates that from the view of Receivables to CAs, Textile
sector occupies the highest position followed by Cement, Engineering and so on. This
signifies that these three sectors have been overwhelmed with Receivables to CAs in
terms of percentage. It has been found that the ratios of Receivable to CAs of Cement
and Food sectors have been found falling on an average and the ratios of Receivables
to CAs of Leather and Footwear sector has been found rising in the study period. But
those of other sectors- Textile, Pharmaceutical and Engineering have been found
moving ups and downs across the periods under study. These indicate that the size of
receivables in CAs in case of Cement and Food sectors is getting smaller during the
study period which resulted in enhancing the profitability of this sector. Again the size
of receivables in CAs in case of Leather sector is getting larger during the study
period which resulted in rising the financial insolvency during the study period in this
sector .The proportion of receivables to CAs in case of other sectors is significantly
rising and falling across the study periods. These rise and fall in assets structure are
indicating the lack of consistency of WCM of sample companies and sectors.

5.2.7 Analysis of WCS in terms of Inventories to CAs

Table 7: Ratio of Inventories to CAs

Industry
2004 2005 2006 2007 2008
Sector Average
in %
Cement 45.06 42.40 39.46 35.27 42.82 41.00
Food 60.49 53.73 64.33 60.71 46.70 57.19
Textile 42.88 49.93 51.85 50.88 53.18 49.75
Pharmaceutical 40.81 36.90 44.65 42.54 43.68 41.72
Engineering 49.80 51.17 49.72 47.75 47.47 49.18
Leather 69.12 68.13 62.52 61.56 63.29 64.92
Sectoral Average 51.36 50.38 52.09 49.79 49.52 50.63
Source: Annual Reports 2003-2008 Note: Data have been compiled by the researchers

The examination of Table 7 indicates that from the view point of Inventories to CAs,
Leather sector occupies the highest position followed by Food, Textile and so on. This
implies that these three sectors have been overwhelmed with Inventories to CAs in
terms of percentage. It has been observed that the ratio of Inventories to CAs of
Textile sector has been found rising on an average and the ratio of Inventories to CAs

9
of Engineering sector has been found almost consistent in the study period. But those
of other sectors- Cement, Food, Pharmaceutical and Leather have been found moving
ups and downs across the periods under study. These indicate that the size of
inventories in CAs in case of Textile sector is getting larger during the study period
which resulted in lowering the profitability of this sector. The proportion of
inventories to CAs in case of other sectors are significantly rising and falling across
the study periods. These rise and fall in assets structure are implying the lack of
stability of WCM of sample companies and sectors.

6.0 Conclusion
6.1 Discussion

This study has barbed that the exemplary companies have more than 50% of the TAs
in the form of CAs on an average. Among the components of CAs, the share of
inventories has been found to be the largest followed by A/Rs and cash in most of the
sample companies. Across the study, it is also observed that the average share of A/Rs
has declined slowly and steadily whereas; share of cash and inventories has increased
steadily over the study period. The largest share of inventories implies that the CAs of
the selected companies seem to have less qualitative aspects.

6.2 Implications

The researchers have found that working capital management practices with respect to
structural context is inconsistence in most of the sample companies. So, some prudent
policy and strategic measures have been suggested for improving the working capital
structure practices. Blocking of working capital mostly in inventory and accounts
receivables need to be reduced as far as feasible. The application of budgetary control
and responsibility accounting techniques is also vital. To the end, an Integrated
Working Capital Management Department should be established in all the model
companies which will be responsible for framing various working capital policies and
also for determining different levels of working capital in consultation with the
respective departmental heads.

6.3 Limitations

In spite of the efforts on the part of researchers, there are still some limitations. The
area of the study was too scattered to reach conveniently for gathering information
within the specified time period and limited budget. However, efforts were made to
limit the area of observation through random sampling method. The study was carried
out on the executives of the corporate office in a piecemeal way and the findings,
suggestions were based on it. Adequate exploration could not be made due to time
and opportunity constraint. The executives of the selected firms were too busy and
unenthusiastic to share the information. In spite of some limitations, it can be said that
the study will throw commendable light on the important and challenging problems of
working capital structure of the model companies, which deserves vigilant
achievement.

10
6.4. Direction for Future Research

Based on the findings, data produced and references of the existing studies, the
following further researches may be conducted: (i) A Study on Inventory
Management in the manufacturing industry of Bangladesh; (ii) A Study on Cash
Management in the manufacturing industry of Bangladesh; (iii) A Study on Accounts
Receivables Planning and Control in the manufacturing industry of Bangladesh.

References:
Ahmed, S. 1996. Impact of Current Asset Management on Performance of Some
Selected Public Sector Chemical and Paper Mills in Bangladesh. Chittagong
University Studies (Commerce), vol.12, pp.69-90.
Ahmed, S. 1991. Cash Management in Private Sector A Study of Some Selected
Manufacturing Enterprises. Chittagong University Studies (Commerce), vol.7,
pp.187-199.
Clarkson, G.P.E., and Elliott, B.J. 1972. Managing Money and Finance. Hants: The
Grower Press Ltd.
Charles, O., Kroncke, E., Nemmers, E., and Gruneweld, E. A. 1978. Managerial
Finance. Minnesota: West Publishing Company.
Deloof, M. 2003. Does Working Capital Management Affects Profitability of Belgian
Firms? Journal of Business Finance and Accounting, vol.30, no. 3, pp. 573 587.
Gitman, L. J. 1976. Principles of Managerial Finance. New York: Harper and Row
Publishers.
Islam, M. N. 2000. Working Capital Management of Sugar Industry in Bangladesh.
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