Corporate Liquidity and Profitability Management: A Study on Textile Industry in Bangladesh

Abstract

Purpose: This study aims to identify, whether corporate liquidity has an impact on profitability management concerning the textile sector in Bangladesh.
Design: This is a causal study where the dependent variable is profitability, measured by Return on Assets (ROA) and Return on Equity (ROE). For the independent variables, the study adopts the traditional liquidity variables, namely Current Ratio (CR), Liquid Ratio (LR), and Total Cash Ratio (TCR). This study is based on secondary data collected from the annual reports of selected textile companies. Here, multiple regression analysis and descriptive statistics techniques have been used to actualize the research objectives.
Findings: The study shows that there is statistically insignificant impact of liquidity on profitability management. It is unlikely that liquidity has influences on profitability management among the textile companies in Bangladesh.
Originality/Value: This study has empirically validated the impacts of corporate liquidity on profitability management. Therefore, the research can be helpful for cash management and increasing profitability concerning the textile sector.