The Optimal Scale Of Trade Credit And Its Initiative And Passive Analysis

Accounts receivable management as the main form of commercial credit management is an important part of credit management.As an important financing tool to ease the financing difficulties of SMEs,trade credit affects the development of enterprises and allocation efficiency of financial resources.Accounts receivable is the main form of trade credit,and the scale of trade credit accounts for the proportion of total assets of the enterprise rise year by year.The ability to effectively and reasonably manage the scale of trade credit,so that it can not only enhance revenues,but also not increase the bad debt risk,has become an important indicator of corporate working capital management capabilities.In order to analyze whether China’s Manufacturing industry companies trade credit excess and the reason for the excess,analyzing the influencing factors of trade credit,building the dynamic adjustment model of trade credit,and calculating the optimal scale and level of bias,And thus introducing enterprise providing trade credit is widespread excess.By examining the bias level and its relationship between enterprise value,analyzing the intrinsic motivation of enterprise to provide a large number of trade credit.Firstly,analyze the influencing factors of trade credit from internal factors and external factors.Research shows that corporate profitability is positively related to the net value of trade credit;cash flow,inventory turnover and enterprise scale are negatively related to the trade credit;bank loans are positively related to the trade credit,which proves the existence of the reallocation effects;there is no relationship between monetary and trade credit.Secondly,on the basis of influencing factors of trade credit,building the dynamic adjustment model,getting the optimal scale of trade credit and level of bias between the actual value and the optimal value.Research shows that there is optimal scale of trade credit supply to maximize the enterprise value,but the actual scale of trade credit is long-term excess,which indicates that there is "chain debt" between upstream and downstream enterprises.Finally,establishing a linear relationship between trade credit bias level and the enterprise value,analyzing the intrinsic motivation of enterprise to provide a large number of trade credit-is active behavior or passive behavior of enterprise.Analysis shows that the surplus of trade credit harm to enterprise value,which conforms to the buyer market theory,in the buyer’s strong market environment,trade credit provider status vulnerable,the earnings of providing commercial credit are insufficient to compensate the potential risk of bad debts,so that is the passive behavior of the enterprise.The optimal scale of trade credit and initiative and passive analysis can provide reference for enterprise credit policy,and help enterprises to better balance the relationship between selling goods and control the risk of bad debts,improve the ability of credit management.