The Research On The Effect Of Working Capital Management To The Enterprise’s Capacity Of Creating Cash Flow

Working capital management is the basis of enterprise capital management. And if working capital wants to realize efficient management, it must rely on making a scientific working capital policy. At present, the current assets, liquidity of which are not strong occupy high proportion in the manufacturing listed companies of China. At the same time, high current liabilities ratio improves the company’s financial risk. These are because of lack of scientific correct working capital policy. In such a background, this paper used the theoretical analysis and empirical analysis, qualitative analysis and quantitative analysis of the combination of research methods, to research manufacturing listed companies about the working capital policy on the influence of enterprise to create cash flow ability.First of all, this paper finds out the starting point of the study and puts forward the proposition in basis of Summarizing and analyzing the present situation of research at home and abroad. Next, the writer discussed respectively the basic theory of working capital, working capital policy, cash flow, and the ability to create cash flow in enterprises. Then, the author selected the2008-2011in Shanghai and Shenzhen two cities listed machinery, equipment, instrument class manufacturing a-share listed companies as the research objects according to the research purpose, and put forward the hypothesis according to this paper research content. Based on clearing up the concept of enterprise working capital policy and the ability of creating cash flow, the writer used descriptive statistics on the current situation of manufacturing listed companies working capital policy. It is concluded that manufacturing widespread the following problems: current assets to total assets ratio was higher, the use of more current liabilities financing led to bigger financial risk and working capital management efficiency had low level. Again, a linear regression model was established, and the SPSS statistical analysis software was used to regress the independent variable, the control variables and dependent variables in regression. The conclusions showed that:In our country, most of the manufacturing enterprises used the moderate and stable working capital policies; For enterprises, the working capital investment policy was more radical, the ability of create cash flow was more stronger; The cash cycle is more shorter, working capital management efficiency is more higher, enterprise to create cash flow ability is more stronger; moreover, working capital financing policy on enterprise to create cash flow ability does not exist significant influence. Finally, on the basis of the conclusion, this paper offers some proposals according to China’s manufacturing industry listed companies’working capital policy formulation in order to create more cash flow.The innovation point in this paper was:From a new perspective, using correlation analysis and establish equation of linear regression method, through empirical analyzing on the influence of working capital policy on enterprise to create cash flow ability. The working capital policies and creating cash ability organically were unified in together which made a very good supplement on the previous research.