Empirical Analysis About Working Capital Policy Of Car Parts Listed Companies

Working capital management is an important part of financial management, and a clear working capital policy is very important for the modern enterprise. As the frequently-used funds, working capital needs to be managed. It runs like the blood of business, and directly influences the other units’vitality of enterprise. It is an important part of financial management to research working capital and work out appropriate policies.Overseas scholars began to study optimization problem of a single part (such as inventory, accounts receivable, cash) since the1930s, and working capital as a whole would be studied mainly in the late1970s. Since then, the further research on the working capital has expanded into optimization and management of supply chain. A number of consulting firms and practice-oriented magazines have played a leading role in tracking the dynamic practice of working capital management. Working capital survey of the largest1000U.S companies which REL consulting firm and CFO magazine of the U.S. conducted should be more prominent.In the1990s China began to implement with the international practice of accounting system, and introduced the concept of working capital in financial management. Gradually there have been some research article on working capital managementThere is no denying that Chinese companies’ performance of working capital management is also generally at a low level compared with that of USA and other developed countries. Chinese companies pay attention to the single current asset more, but lack a clear working capital policy. Our companies need scientific theory to strengthen the working capital management urgently. As the heart of short-term financial management, working capital policy belongs to a scope of empirical analysis chiefly. Nunn and Kenneth P. Jr’s findings in1981showed that the working capital policies in different sectors are provided with different features. In this paper, we study the features of working capital policies of car parts industry by empirical analysis according to2000-2009annual report of over30listed companies. We hope that the findings will be helpful to the small and medium car parts enterprise.The results show that:(1) Since the accession to the WTO, the working capital policy of China car parts industry shifted from the moderate type, and there is the trend of radicalism according to the research files. Current assets descend when current liabilities increase year by year.(2)The level of working capital management has greatly improved, and the cash flow period has been shortened from254days in2000to78days in2009. But it is still below the level of enterprises in Europe and America.(3)The scale of inventory and accounts receivable is growing, but the both proportion of total assets have been relatively stable.(4)The proportion of current asset is not significantly correlated with enterprise value, but negatively correlated with cash flow.(5)The proportion of current liabilities is negatively correlated with enterprise value.(6)Cash flow period is significant negatively correlated with cash flow and enterprise value.