Impact of Working Capital Management on Meghna Cement's Profitability

This report presents an analysis of the impact of working capital management on the profitability of Meghna Cement Mills Ltd. The study investigates the relationship between various working capital components, including the current ratio, average collection period, days inventory held, payment deferral period, and cash conversion cycle, and their effects on return on assets (ROA) and return on equity (ROE). Using regression analysis on data from 2011 to 2021, the report reveals that a higher current ratio positively impacts profitability, while an increased average collection period and days inventory held negatively affect profitability. The analysis also shows that the cash conversion cycle has a positive relationship with ROA and ROE. The findings highlight the importance of effective working capital management for enhancing the financial performance of Meghna Cement, offering valuable insights into optimizing financial strategies and improving shareholder value. The report emphasizes the need for efficient management of receivables, inventory, and payables to maximize profitability.