| Working capital management is the core of the short-term financial management. Its components are closely related with the enterprise's almost all aspects of production and operation. Working capital policy and management efficiency can affect the value of enterprises. Most of the foreign and domestic scholars in empirical studies have proved this conclusion. The current value of the future cash flows represents the enterprise's value. Measuring the enterprise's value from the perspective of cash flows will be more realistic and scientific. In this paper, researching the effect of working capital management to the enterprise's capacity of creating cash flow will have important research significance to explore the suitable working capital policy and the manner to improve the management efficiency for Chinese enterprises to get more cash flow.In this paper, the time period of empirical research is from 1999 to 2008 a total of 10 years and the study sample are the Shanghai and Shenzhen cities of the machinery, equipment, instrument manufacturing industries A-share listed companies. I integrated use of literature analysis, descriptive statistical analysis, correlation analysis, regression analysis, cluster analysis and case study totally six methods to research China's manufacturing industry listed companies'working capital investment policy, financing policy, management efficiency the status quo, as well as impact on enterprises to create cash flow capacity. The results of empirical research show that: (1) the more aggressive working capital investment policies, the stronger enterprises to create cash flow capacity; (2) working capital financing policy had no significant effect on enterprises to create cash flow capacity; (3)China manufacturing industries listed companies excessive investment in current assets and over-reliance on current liabilities;(4) the higher the efficiency of working capital management, the stronger enterprises to create cash flow capacity; (5)China manufacturing industries listed companies'overall level of working capital management efficiency is not high, but there are significant differences between the various companies.On this basis, I take Haier as instance and use data to explain its advanced level compared with the industry average in working capital management efficiency and ability to create cash flow. In-depth analysis of its successful application of zero working capital policy experience, I put forward four recommendations from the point of zero working capital to change the working capital management status quo of China's manufacturing industry companies to get more cash flow:(1)establishing a strong and secure supply chain;(2)full using the information technology to achieve high-speed operation of the logistics;(3)making the valuable procurement and production based on market demand;(4)establishing a favorable and smooth distribution channels.In this paper, I made a breakthrough in the perspective of research. Through research and analysis of relevant literatures of China and fremdness, I found that on the empirical research of the working capital management and enterprise performance or enterprise value related issues, the majority of scholars were based on the total return on assets, return on equity ratio which reflected from the balance sheet and income statement as indicators to represent the company's performance or value. This kind of situation will cause the ignoring of the enterprise's cash flow and resulting in the empirical research system of working capital management related issues incomplete. More importantly, the current value of the future cash flows represents the enterprise's value. If the enterprise's profits do not have support of cash flow, the authenticity of the enterprise's value they reflected is debatable. In order to compensate for lack of such research and further improve the empirical research system of working capital management, I break the original research perspective and seek to reveal the effect of working capital management to the enterprise's capacity of creating cash flow. |
