The Impact Of Working Capital Managementefficiency On Firm Performance From Theperspective Of Channels

Working capital is one of the indispensable parts for the company to maintain a healthy operation.By using applicable working strategy,the working capital allocation,which shows an essential effect in the survival and future development of businesses,can enable firms to optimize and improve their internal business processes.In other research,the author always classifying the working capital by different sub-categories.Generally,they pay attention to analyze the single factors and ignores the internal relation between the various elements.As a result,it exposes a separation between theory and practical purpose.Because of the evolution of theories,such as supply chain management,channel management,and customer loyalty system,researchers gradually shifted their focus from the traditional way of working capital studies to a channel-based approach.After using the new approach,the working capital is divided into operational working capital and financing working capital.Among them,there are three sub-groups under the operational working capital:procurement working capital,production channel working capital,and marketing channel working capital.China's automobile manufacturing industry has developed rapidly in recent years and has become one of the pillars of the national economy.The production and sales volume has been ranked first in the world for ten consecutive years.But fast development is also caused the huge challenge of transformation and upgrading.In addition,automobile manufacturing is a typical chained industry that has three kinds of business: procurement,production,and marketing.It is a comprehensive industry with high correlation,with high-tech integration and remarkable economies of scale.The industry has a wide range of effects,it also brings large propulsion on the development of the national economy.Therefore,it shows a great significance to explore the impact of the working capital management on corporate performance from the perspective of channels.This article summarizes the weakness of the current research sector and proposes the research topic by studying and consulting from other research includes three aspects: working capital management,company performance,and the impact ofworking capital management on firm performance.Taking automobile manufacturing enterprises as the research object,using the total return on assets to measure the performance of firms.The working capital management efficiency is expressed by the operational working capital turnover period,the financial working capital turnover period,the procurement working capital turnover period,the production channel working capital turnover period and the marketing channel working capital turnover period.It uses to separately study the impact of each working capital turnover period on firm performance.Based on relevant theoretical derivations,the hypothesis is proposed.The data were verified and analyzed,and the relevant conclusions were drawn: The operational working capital turnover period has a negative impact on corporate performance;the procurement working capital turnover period has a negative impact on corporate performance;production channel working capital turnover period and marketing channel working capital turnover period has a negative impact on corporate performance;the impact of the financial working capital turnover period on corporate performance is reversed “U” type.In order to enhance the reliability of the research results,this article replaces the return on total assets by the net asset equity rate and performing a stability test on the way in which the dependent variable lags in the first phase.The test results are consistent with the previous empirical results.Finally,based on the further analysis of the research results,the paper proposes policy recommendations related to improving the efficiency of the management of working capital in the automobile manufacturing industry.