Relationship between Liquidity and Profitability of Pharmaceuticals and Chemical Companies

Abstract

The most prominent questions in the literature on corporate finance are Profitability and liquidity. Profit maximization is ultimate goal of the any company. However, excessive concentration on profitability could sway the company in peril by reducing the liquidity position. Accordingly this study is conducted to determine the cause and effect of the liquidity profitability relationship. The study covered 22 listed pharmaceuticals and chemicals companies in Bangladesh over a period of past 5 years from 2014 to 2019. Correlation analysis and descriptive statistics were used in the analysis and to find the relationship between liquidity and profitability within the listed companies in Bangladesh.