Influence Of Public Companies’ Financial Crisis On Costs Expenses Stickiness

These years many public companies are so inefficient and costly that left the finances of their’s rich in tatters, and then it causes a vicious circle. Profitability is treated as the source of competitive differentiation, and cash is considered as the blood of company. If profitability is not achieved in the cash, even with the high profitability capital chain may be broken completely as well. So it is important to pay attention to the relationship between financial condition and the both the two sides—profitability and cash flow. The two sides are also important reflection of operation management efficiency, while the stickiness plays the financial performance of operation management efficiency. So it is necessary to analyze the operation management efficiency by operating costs & expenses and capital expenses.Based on the theory review of financial crisis, cost & expenses stickiness and working capital management this paper takes the stickiness analysis as point cut, and expands costs & expenses stickiness model to capital expenses stickiness analysis. Relating the analysis to financial condition with quarter data look for that how the financial crisis impacts on costs & expenses stickiness. Then make hypothesis on it and check the hypothesis by demonstration analysis. Chose the ST companies which are for the first time listed as ST Company due to financial problems during 2012 to 2014, and chose the non-ST companies as corresponding control group. Test the financial crisis’ impact on costs & expenses stickiness by comparing the different stickiness between ST companies and non-ST companies. Study the ST companies’ operation management problems by analyzing the reversal and inversion of stickiness. The empirical results show that,(1) There is a strong relationship between financial crisis and costs & expenses stickiness;(2) The operation management of ST companies has efficient but not well. Costs & expenses stickiness is chiefly due to the irrational adjustment of resources, improper credit policy, and overly dependence on capital occupying on supplier. Finally, the paper provides several suggestions on the operation management.The paper researches on the ST companies’ operation management problems by analyzing the financial crisis’ impact on costs & expenses stickiness. On the one hand, it will be conducive to making a further understanding about operating conditions for the manager. On the other hand, it will provide external users a new way to judge operating condition with limited information directing investors to evaluate warrant correctly.