Case Study On SQ’s Working Capital Management

Working capital management of an enterprise involves all aspects of the daily operation of the enterprise,which is an important guarantee to maintain the normal operation of the overall business activities of the enterprise.However,in recent years,there have been frequent incidents of corporate debt default and corporate capital chain crisis in China.To some extent,it shows that there is a lack of financial policy mechanism and management model formulation for operating working capital in Chinese enterprises,and enterprise managers generally lack attention to the management of working capital.With the steady progress of Chinese supply-side structural reform and the slowdown of market growth after the explosive growth,automobile manufacturing industry,as an important part of the national economy,is facing various pressures and challenges.Therefore,it is of great significance to strengthen the working capital management level of automobile manufacturing enterprises to promote the healthy development of the industry.This paper selects SQ company,a leading enterprise in the domestic automobile manufacturing industry,as a case company.After a brief summary of its industry and working capital situation,the working capital management mode and current management status established by SQ company based on channels are deeply explored.Then evaluating the efficiency of its working capital management from the perspective of factors and channels,and analyzing the structure of its working capital and its short-term solvency.I find that comparing with other enterprises in the same industry,its working capital management level is in the upstream position.On this basis,this paper summarizes the advantages of the company’s working capital management.By referring to this model,this paper puts forward some suggestions for the management of working capital of other enterprises in the automobile manufacturing industry:In terms of purchasing channels,we should attach importance to the relationship with suppliers and strictly control the amount of raw material inventory.In terms of production channels,we should pay attention to r&d investment,promote technological innovation,and optimize production plan with the help of information platform.In terms of marketing channels,we should establish a comprehensive evaluation system for dealers,pay attention to accounts receivable management,and ensure the return of funds;In terms of overall working capital management and control,we would build an industrial Internet platform to achieve comprehensive informatization of business processes.