Case Study Of Shanghai Pharmaceutical Group's Working Capital Management

Working capital management is the essential process of daily operation, and its management result is directly related to capital turnover, earnings and enterprise value.Nowadays, the trend of economic globalization is gradually speeding up, the pressure faced by enterprises is continuously increasing, and the benefit of working capital management is attracting more attention. However, the lack of working capital management is a common problem for Chinese enterprises. How to avoid the crisis under this problem and enhance management performance are popular research topics for academical and business field. Since traditional working capital management theories and methods are imperfection they are no longer adapted to modern enterprise management. According to the defect of working capital management and previous research experience, local academics systematically analyzed the content of supply chain management and client relations, which no longer limited to single research method. As a result, appropriate working capital management system,namely working capital management system based on channel management is gradually established. Due to the reconstruction of related working capital management concepts, new system pays more attention to uniform synthesized management and lays more emphasis on the relation between capital management and enterprise performance. Additionally, various working capital conditions under different channels are valued more precisely with the help of this new management system.Based on related theory, this paper selected one of the leading pharmaceutical manufacturing enterprise which is called Shanghai pharmaceutical group as research object. After analyzing the working capital allocation, management performance and financial risk of Shanghai pharmaceutical group from 2011 to 2014, this paper indicates that the advantages and disadvantages of this groups working capital management. Specifically, the working capital management of Shanghai pharmaceutical group brings beneficial change, which makes its working capital management capability far above the average level; However, the shortage of itsworking capital management still exists and needs to be improved. Additionally,based on the above-mentioned analysis suggestions for Shanghai pharmaceutical group on working capital management are put forward, which provides references for similar enterprises.