Evaluation Of Sofia’s Working Capital Management Performance Based On OPM Strategy

Driven by major national strategies such as China’s "Industry 4.0" and "Made in China 2025",China’s home improvement industry has seen rapid development,with a large number of home improvement manufacturers beginning to transform into bespoke home improvement companies.However,with the rapid development of this industry,while attracting external funds,competition has also intensified,and factors such as the post-epidemic period and national macro-control have had a certain impact on the development of China’s real estate industry.Therefore,in order to achieve a headwind,furniture customisers in China have started to pay attention to the management of the company’s working capital by adopting the OPM strategy,which manages the company’s working capital by transferring funds to suppliers and customers.The OPM strategy is a new working capital management strategy based on Chinese practice,which enables the company to obtain larger working capital,eliminates the company’s concern about the availability of funds and reduces The OPM strategy enables companies to use their voice and influence in the industry to take up capital from upstream and downstream companies without compensation,expanding their scale and forming a virtuous circle.At present,the number of industries implementing OPM strategy research is small and concentrated.Therefore,by analysing the efficiency of working capital under OPM strategy,it can supplement and extend the relevant theories of OPM strategy and provide some reference and help for its better realisation.This thesis takes Sofia,a leading Chinese custom home furnishing company,as an example,and uses entropy analysis to comprehensively assess its working capital management under the OPM strategy by analysing its internal and external value chain.Eleven indicators based on liquidity,safety,profitability and concentration were classified and scored for both internal and external value chains.From the results of the assessment,Sofia performed best in profitability,second in safety,third in liquidity and worst in concentration in the working capital management process.The analysis revealed that Sofia’s OPM strategy is characterised by poor capital management,a high proportion of current liabilities,inefficient and underdeveloped marketing channels,and an overly compressed survival space for suppliers.It also proposed optimisation strategies to address the shortcomings:(1)Appropriately reduce the current debt ratio and optimise the internal structure of working capital.(2)Strengthen the turnover of accounts receivable and develop customers with guaranteed solvency.(3)Improve the sales channel layout model to enhance working capital turnover efficiency.(4)Strengthen supplier relationship building and integrate external advantageous resources with modern technology to achieve channel information sharing.It is hoped that this will serve as a guide to the implementation of OPM strategies for home customisation companies.