The Research Of Working Capital Management And Corporate Performance In Chinese Manufacturing Listed Companies

Manufacturing industry is the pillar industry in our People’s economic industries. Theimprovement of its competitiveness contributes to our international competitiveness. Workingcapital is the lifeline of the enterprise, related to the production and operation of variousaspects, is the main work of financial managers. Along with the daily fund turnover difficultly,errors in management decision and so on, the enterprise fund chain is in the weakest part ofenterprise working capital. Many materials show, corporate risk due to mismanagement offunds, resulting in bankruptcy cases emerging in an endless. Through the effectivemanagement of working capital, while guaranteeing enterprise liquidity, can accelerate theturnover speed of working capital, finally realizing the continuous upgrading of enterpriseperformance.This article selects the sample data from China’s two cities (Shenzhen and Shanghai) of400manufacturing listed companies from2004to2010semi-annual report and annual report.First of all, put forward the related theory and the literature at home and abroad are reviewedand summarized. At the front of the base, our country manufacturing industry undertake tolisted company operating funds in descriptive statistical analysis, mainly from the workingcapital policy and management efficiency two respects. Through the descriptive statistics,China’s mainly used the tight investment strategy and aggressive strategy in working capitalmanagement before2008.After then mainly used conservative, sound investment strategy andfinancing strategy.The empirical part: separately from the working capital strategy and managementefficiency two respects, it is important to study their relationship with firm performancethrough empirical method. Working capital policy empirical results: liquidity ratio as theproxy variable of the working capital investment strategy is positively related to businessperformance. The results of current liabilities ratio as the proxy variable of the workingcapital financing strategy and flow ratio are opposite to the liquidity ratio. The efficiency ofworking capital management of the empirical results: cash cycle components (accountsreceivable turnover, inventory turnover period and accounts payable turnover period) are allnegative correlation with enterprise performance. Finally, in the actual situation in China islinked to the premise, from the status analysis and on the basis of empirical research, thepaper draw the conclusion and deficiency.