Cash Management Strategy of Blueocean Footware
Rahman, Raihan Bin
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Bangladesh is a densely populated country with a GDP growth of more than 7% per year. Considering this huge number of population and other investment opportunities, Bangladesh is now considered word’s one of the emerging economy and it aspires to be world’s one of the strongest economy by 2030. Everything is available in this country and the business environment is also very much positive with a supporting government in terms of FDI. The enormous support from the local government and employment seeking population has made this country one of the optimum location for the foreign investments. With that consistency, rise of many industries have taken place in Bangladesh. Leather goods and footwear industry is one of them and it’s considered to be one of the largest economy drivers of the country. In this report I have tried to understand the cash management strategy of BOFL by analyzing their cash management strategy where it has been found that they have maintained current assets 1.32 and 1.19 times during 2015 & 2014 consecutively. However, they have less than 0.5 times net cash deficiency in both the years to meet its total obligations. This means that they do not hold large amount cash, but invests in the assets or other sources. Although they have a little bit deficiency in meeting the total obligations, but they have achieved efficiency in cash conversion cycle by 28 days during the 2 years period of time. To abridge, the company has been significantly solvent throughout these two years by maintaining a solvency ratios of 39.87% in 2015 and 26.99% in 2014 consecutively which are more than 20% that is required to maintain. On top of that, in 2015, the company has achieved a higher solvency ratio than 2104.
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