Report on Working

Capital
Management of BD
Autocars Limited

Name: S. M. Abir Sadad

ID# 1210312630
Course: Fin 340
Section: 6

Submitted To: Slh

Acknowledgement
This report has been a revelation for me & foremost would like to thank Almighty Allah for His
guidance in our lives.
I am fortunate to have the support, assistance & encouragement of a number of individuals while
preparing this report, without their support, it would be hard to complete this study.
I convey my sincere gratitude to our institutional supervisor, Shahidullah sir, Lecturer, School of
Business, North South University; you are such a good instructor who helped me in
understanding the course materials. Besides, you gave me the opportunity to present my own
ideas regarding working capital management and business strategies, which really helped me to
understand how working capital management contributes to operate and run a successful
business.

Letter of Transmittal
11 December 2014
Shahidullah
Lecturer, School of Business,
North South University

Dear Sir,
It has been a great pleasure for us to submit this Report. This Report has been prepared by me as
a part of Introduction to Working capital management course. It is prepared after collecting
secondary data which the financial statements of the respective company for the last 10 years.
This Report gave us an opportunity to apply our financial knowledge in the real world. I
sincerely hope that you will enjoy reading this report.

Thank you,
Your sincerely
S. M. Abir Sadad (ID:1210312630)

Executive Summary

Working capital management is a vital task that every business needs to carry out. BD Autocars
Limited is a local company that is going through a tough situation financially during the last few
years. The report contains thorough analysis of all the financial ratios, that includes liquidity
ratios, debt management and coverage ratio and performance ratios. The comparison between the
companys sustainable growth rate actual growth rates is also executed. Finally, analysis on its
working capital management is made. In accordance to the current situation, it is very important
for BD Autocars Limited to make a recovery plan in order to get back a strong foot holds in the
business world. Some suggestions are given in the light of working capital management. It is
expected that BD Autocars Limited can come from its current situation if the plan suggested is
effectively implemented.

Introducing Working Capital Management

Working Capital Management deals with current assets and current liabilities. Before, the
researchers in corporate finance have focused on the long-term financial decisions making, such
as capital structure, dividends, investments, and company valuation decisions. However, shortterm assets and liabilities are important components of total assets and needs to be carefully
analyzed. This is because it directly affects the liquidity and profitability of the company.
Management of these short term assets and liabilities needs a careful investigation since the
working capital management plays an important role for the firms profitability & risk as well as
value. Firms try to keep an optimal level of working capital that maximizes their value
A company can be endowed with assets and profitability but short of liquidity if its assets
cannot readily be converted into cash. Positive working capital is required to ensure that a firm is
able to continue its operations and that it has sufficient funds to satisfy both maturing short term
debt and upcoming operational expenses. The management of working capital involves
managing inventories, accounts receivable and payable, and cash.