Relationship Between Working Capital Management And Enterprise Value Under The Perspective Of Financial Risk

As the "blood" of the enterprise, working capital attracts more and more attentionfrom researchers and managers, as well as the working capital management research.But our working capital management’s research of theory and practice has not receivedthe attention it deserves, and this problem is increasingly outstanding. In theory, ourcountry lack of theoretical innovation and empirical research in the respect of workingcapital and working capital management, and the empirical research of the relationshipof working capital management and enterprise value is not comprehensive, also theconclusion is inadequate. The research of management practice lack of systemintegration, leads the concept of working capital is difficult to define, which is notconducive to the development of the management of working capital. By researchingthe relationship between working capital management and enterprise value useempirical studies, it can help us to compensate for the theory research of workingcapital management, improve working capital operate efficiently. Growth EnterprisesMarket (GEM) began run on October30,2009, high-risk high-yield is the mostdistinguishing feature of listed companies on GEM. Researching the relationshipbetween working capital management and enterprise value of listed companies onGEM under the perspective of financial risk is necessary. Its research results not onlybeneficial the listed companies on GEM to improve the management level of workingcapital, improve enterprise value, but also good enough to learn from small andmedium-sized enterprises.This article use a combination of theoretical analysis and empirical analysis,researching the relationship between working capital management and enterprise valueunder the perspective of financial risk. In order to perfect the theoretical basis ofworking capital management, this article refer to use the latest concept of workingcapital, combined with the business activities of enterprises for working capitalclassification, then the relationship between working capital management and enterprise value will be more clear. When running this empirical research, this articleselects the gem listed company’s data from2009to2012, using descriptive statisticalanalysis and regression test analysis, examining the correlation of the working capitalturnover period and enterprise value, we draw the conclusions as following: enterprisevalue is significantly affected by conversion cycle of working capital in businessactivities, that is, the shorter the conversion cycle of working capital in businessactivities, the better the enterprise value is; it present a complex linear relationshipbetween the conversion cycle of working capital investment activities and financingactivities and enterprise value, which influenced by the enterprise financial situation.At the same time, the article explains the reasons for this relationship, and puts forwardspecific suggestions for enterprises to strengthen the management of working capital.The innovation of this article is mainly reflected in: selected the gem listedcompanies as research samples, then the research conclusion will be more targeted;innovation research perspectives--from the perspective of financial risk; used F scoremeasure enterprise financial risk, provide data support for this research; variables inthe study are more comprehensive and improve the fitting of the empirical model.