Working Capital Management Practices: A Study on Tokyo Consulting Firm Limited, Bangladesh

Abstract

The purpose of this report is to examine the working capital management of Tokyo Consulting Firm (TCF) Bangladesh for the five financial years from 2021 to 2025 in detail. TCF Bangladesh was established in 2011, as a 100% subsidiary of Tokyo Consulting Group, Japan, a management and IT consulting service provider to companies around the world. TCF is primarily involved in assisting the Japanese companies to establish and operate business in Bangladesh and provide services such as company registration, tax and VAT related issues, bookkeeping and corporate secretarial issues in Bangladesh. To sum up, TCF serves as a link between the regulatory set-up in Bangladesh and the Japanese investors. The core of this report is working capital management, which is a management issue of keeping a balance between short-term assets (such as cash and accounts receivable) and short-term liabilities (such as provisions and other current liabilities) of TCF. It's not just important to strike the balance, but it's also important that the company does not have so much sitting still that they are not taking advantage of the money. For this purpose, the report is based on five years' data with reference to the various constituent parts such as cash and cash equivalents, advances against fees, accounts receivable, provisions for taxation, and other current assets and liabilities. All this is based on secondary data, namely the Audited Annual Financial Statements prepared and certified by a well-known audit firm in Bangladesh (TCF Bangladesh) in Bangladesh. The data presented in this report is based on certified financial statements and, therefore, is based on actual and verified numbers and not assumptions. The report is centered on the one idea: liquidity. In other words, the speed and simplicity with which TCF can convert its assets into cash should it be needed to meet short-term obligations. This information can help to explain not only TCF's financial results, but also to identify the potential for better cash and working capital management in the future.