The Research About Working Capital Management And Performance Improvement Of Vehicle Manufacturing Listed Companies In China

Our vehicle manufacturers listed companies are the typical representatives of China’s automobile industry. They are playing an important role in our national economy. As China’s economy has been under the new normal:The slow economic growth, the crash by the mobile-Internet economy, the dramatic changes inside the automobile industry, the increasingly diverse competition, the frequent product quality problems, all above resulting in the vehicle manufacturing listed companies improving the inner management continuously.This paper is aim to find out the influence of the working capital to the vehicle manufacturing listed companies’ revenues. Through the Empirical Analysis, something is been found out:First, the curve of the current ratio and the ROE looks like the U-shaped inversely, while the curve of the quick ratio and the roe is the U-shaped. As the indicator is above zero, the current ratio is a negative indicator and the quick ratio is a forward indicator. So the vehicle manufacturing listed companies must make a balance between the two indicators in order to keeping a good corporate performance. The key to the problem is the management to the inventory. The companies should actively adopt the foreign management knowledge, like "instant manufacturing" and "zero inventory". Second, for the working capital turnover indicators, the working capital turnover ratio plays a less important role in the revenue growth of the vehicle manufacturing companies listed. While the operating-cycle is negative to the corporate performance. So moderately shortening sales-cycles, and increasing the efficiency of current assets turnover will help improve business performance. Third, in terms of the capital structure, our vehicle manufacturing companies listed is with a higher proportion of liquid assets, which impact the enterprise’s roe more significant. In the short term, increasing the proportion of liquid assets will help improve business performance. The current liabilities ratio has a U-shaped structure with the firms’roe. The firms should maintain an appropriate current liabilities ratio, especially the ratio must be controlled within 0.89, within which the indicator will play a positive marginal effect on firm performance. Fourth, in terms of the inventory and asset management, there is a higher asset impairment losses and inventory impairment ratio, which greater impact the business performance.In summary, our vehicle manufacturing listed companies should claim the theory of "zero inventories", decline the number of the inventories, and recreate the business process in order to improving the efficiency of the inventory management. And the vehicles manufactories should do the industries integration and cooperate with other big corporate to build new business and financing channels.