The Empirical Research About The Influence Of Working Capital Management On Enterprise Performance

The real estate industry which highly correlated with the iron and steel, construction,communications, finance and insurance industry is pillar industry in China. It plays a stimulating role tothe growth of the national economy. Along with the rapid development of market economy andgovernment policy supportting, real estate industry in China become the fastest growing industry in the21st century.Government regulation of the real estate market becoming increasingly severe recentyears.The statistics show that real estate sales growth continues to fall and housing prices fall sharply insome cities.There are indications that China’s real estate regulatory policy is to gradually play a role. It isforeseeable that prices will return to the rational trade order will continue to regulate in the future periodof time.Meanwhile, the competition is increasingly fierce, real estate companies which is below averagestrength, inefficient working capital management will face the risk of funding strand breaks. Therefore,working capital management and corporate performance of listed real estate companies is very necessary.Strengthening working capital management and improving business performance is the inevitable choiceof the real estate business managers. This paper conducted in-depth analysis and empirical research onworking capital management issues. There is a certain innovation on research ideas and research methodsin this area. The main research achievements are as follows:First of all, it expounds working capital management theory and analysis the characteristics ofChina’s real estate industry. Descriptive statistics results show that: listed Real Estate Companies take amore conservative working capital investment policy and a more radical working capital financing policy.It shows a declining trend of working capital management efficiency. It also points out that the currentproblems in China’s real estate industry on working capital management: liquidity usage is too high;liabilities excessive; working capital turnover is too slow.Secondly, the article selected50listed real estate companies as our sample. By means ofmultivariate statistical analysis of the linear regression method in the software EVIEWS. In fact, permitconclusions show liquid assets ratio and business performance is a significant positive correlation; Thecash cycle, current ratio and enterprise performance significantly negatively correlated; There doesn’texist a significant relationship between current liabilities ratio, current asset turnover, advances fromcustomers accounting for current liabilities and firm performance. Listed real estate companies’ workingcapital management does affect the firm performance, but this effect is not obvious because the companyworking capital management performance theory is applied to mature industries. Real estate industry is avery large industry affected by the impact of policy. The impact of policy factors on firm performance isfar greater than the impact of working capital structure.Finally, based on empirical results we put forward countermeasures and suggestions to improveChina’s real estate industry working capital management to improve business performance. Strengthenthe capital chain management, always pay attention to cash flow. At the same time maintaining a highproportion of liquid assets should pay attention to the security of funds. Vigorously develop the capitalmarket, promote the diversification of financing channels. Take full advantage of the leverage effect oflong-term liabilities while reducing the financial risk.