The Empirical Research Of Working Capital Policy And Corporate Performance In Manufacturing Listed Companies

Manufacturing industry is the pillar industry in our People’s economic industries. The improvement of its competitiveness contributes to our international competitiven-ss. Working capital, related to the production and operation of various aspects, is compared to the blood of the enterprise by many scholars. Along with the daily fund turnover difficultly, errors in management decision and so on, the enterprise fund chain is in the weakest part of enterprise working capital. Many materials show, because of the capital chain rupture and ineffective capital turnover, a lot of companies came into bankruptcy. Through the effective management of working capital, companies not only can guarantee the enterprise liquidity, but also can accelerate the turnover speed of working capital, finally realizing the continuous upgrading of enterprise performance.This article selects the financial sample data from China’s two cities (Shenzhen and Shanghai) of 882 manufacturing listed companies from 2011 to 2013 and annual report. First of all, clarify the research background, the research purpose and the research contents of this article. Then put forward the literature at home and abroad are reviewed and summarized and expound the related theory which are applied in the article. On the basis of the literature review and theoretical statement, this article applied the related enterprise life cycle theory to divide different life cycle of different corporates and clarify the four kinds of working capital management strategies are involved in this paper. After that, make some descriptive statistical analysis about the relation between working capital policy and corporate performance under different life cycle. Through the descriptive statistical analysis, it reveals that in the initial stage, more companies take the moderate policy with both higher and the radical type of working capital policy, and the companies who take the moderate policy with both higher will have the highest ROE; in the growth stage, more companies take the cautious type of working capital policy and the moderate policy with both lower, but the highest ROE exists in the companies who use the moderate policy with both higher, which indicate that many companies maybe need to change their existing working capital management policy; in the mature stage, more companies take the cautious type of working capital policy, but the radical type of working capital policy will bring the best ROE; and in recession stage, more companies take the radical type of working capital policy, which will lead to the lowest ROE. After that, the article makes some empirical research in order to determine whether the working capital policy which the enterprise chooses and working capital management efficiency will bring the best performance.In empirical part, the article researched their relationship with corporate perform-ance through the empirical method from the two aspects:working capital policy and working capital management efficiency. The empirical results reveal that in the initial stage, the companies will gain higher performance if the companies choose the mode-rate policy with both higher or cautious type of working capital policy; in growth sta-ge, suggest corporates take the moderate policy with both higher; in mature stage, the regression model results show that using radical type of working capital policy will get higher performance; and in recession stage, the cautious type of working capital policy is the best choice.Finally, combine the actual situation in China with the premise, the article draw the conclusion and deficiency and the future research direction from the status analysis and the empirical research results.