Corporate Liquidity and Profitability Patterns of Some Selected Textile Manufacturing Companies Listed with Dhaka Stock Exchange Limited

Abstract

Liquidity and profitability management are vety important issues in the growth and survivai of buiiness entity. The ability to hold the trade-off between the two elements concerns the financial managers because either inadequate liquidity or excess liquidity may be damaging to the smooth operations of the organization as well as profitability. The primary aim of this paper is to see empirically the overall liquidity and profitability "oniitio, of textile industry and finding out whether there is any significant relationship between liquidity ancl profitability based on performance ofsome selected manufacturing companies in textile industry- listed with Dhaka Stock Exchange Limited. The analysis is bosid on a sample of .five manufacturing companies of textile industry listed with Dhaka Stock Exchange Limited for the period 2009-2012, i.e., fifteen firm years. Correlation analysis and descriptiye statistics were used in the analysis. Findings suggest that there is no statistically significant relationship between liquidity and profitability and have a relatively weak liquidity conditions among listed manufacturing companies of textile industry. Besides, the study suggests that the liquidily has low degree of influence on the profitability and there exist an inconsistency in liquidity and profitabiliS, management among the selected mandacturing companies.