Working Capital Management: an Empirical Study of Beximco Pharma in Bangladesh

Abstract

Working capital is a financial measure which stands for functioning liquidity accessible to a business, organization, or other institution, for example, governmental institution. Along with permanent assets, for example, building and equipment, working capital have deemed a component of operating capital. There are four basic parts of the working capital. To meet the daily obligation and to run an organization smoothly organization keep working capital. And to maintain working capital managers should think two different sides 1) if they hold more working capital, then they keep the more liquid money on hand for this they could invest less. 2) If they hold less liquid money on hand than they face problems to meet their daily obligation. So working capital or liquid money should behold at a rate where they easily meet their daily obligation and also consider investing. Investment is the main motive of an organization, working capital is also an investment to run the organization smoothly. This paper determines at which rate the organization should take working capital or effectively use working capital. The necessity for working capital fluctuates from industry to industry, and they can even differ among comparable companies. This is because of various ingredients, for example, the divergence in the compilation and settlement policies, Time of asset purchases, the possibility of a company script off a few its past accounts receivable due, and on any occasion, capital-breeding attempt a company is an endeavor. Working capital is the part and parcel of an organization to manage it’s a daily obligation. Beximco Pharma was established in 1976 and launched activities in 1980, it’s the leading manufacturing company in Bangladesh. It produces goods under the licenses of Bayer AG of Germany and Upjohn Inc. of the United States. Nowadays Beximco Pharma produces and markets its qualified generics for various diseases in particular AIDS, cancer, asthma, hypertension for both domestic and global markets. This study is based on working capital management. To manage such a massive organization working capital is very essential. Excessive and deficit working capital, both harmful to an organization. The need for working capital is based on the nature of business. Bangladesh is a developing country and its GDP is increasing day by day. Overpopulation is not the only curse but also a blessing because of cheap human resources. It follows a mixed economy (capitalism and socialism) for this business organization to find a suitable environment. In the medicine industry, Bangladesh has a good fame in the international market. Working capital and economic situation have a positive relation. Economic situation impact on organization function.