Study On Working Capital Management And Bargaining Power Of Growing Waterproofing Enterprises

Waterproof material is a seemingly small but actually important link in the real estate industry chain.With the rapid development of China’s real estate and infrastructure construction since the reform and opening up,the waterproof industry has also ushered in a period of rapid development.For waterproof enterprises in the growth stage,they need additional funds to invest in new production capacity.After the new production capacity is put into operation,they also need matching working capital,resulting in a large demand for funds.However,due to the characteristics of the industry,the working capital of waterproof enterprises is easy to be occupied by other links of the supply chain,and their own cash flow is poor,which makes the growing waterproof enterprises easy to fall into the dilemma of working capital management.Working capital management is the scientific management of current assets and current liabilities of enterprises,which is closely related to the use of enterprise funds.Therefore,working capital management is very important for waterproof enterprises.Working capital is also the most liquid part of all projects of the enterprise,and working capital management is also the most important part of all management links of the enterprise.The research on the working capital management of growing waterproof enterprises has great theoretical and practical significance.This paper reviews the research results of domestic and foreign scholars on working capital management,and makes an in-depth analysis of its working capital management by using the method of case analysis combined with the financial data and development process of Dongfang Yuhong from 2008 to 2020.Dongfang Yuhong has improved the efficiency of working capital management from various ways and angles.In addition to implementing lean production,information construction and other inventory related working capital management measures,Dongfang Yuhong also focuses on improving its working capital management on improving its bargaining power with upstream and downstream.For the upstream,it mainly obtains more procurement credit by expanding the procurement scale,and for the downstream,it makes full use of the characteristics of high brand preference of waterproof materials customers and attaches importance to brand management,In the early stage of development,the brand influence was improved by providing waterproof for national well-known construction projects.Through multi regional layout and paying attention to engineering channels and construction business to ensure service quality and product quality,the good brand effect improved its overall bargaining power to downstream customers,and then strengthened the management of accounts receivable and improved the efficiency of working capital management.Through the above measures,Dongfang Yuhong’s bargaining power in the supply chain has been improved.The improvement of bargaining power has improved the efficiency of working capital management by affecting commercial credit,and the quality of operating cash flow and profit has also been greatly improved.In the past,few scholars studied working capital management from the perspective of improving the bargaining power of enterprises.This research is conducive to make up for the domestic research results on the direction of working capital management.Finally,we put forward three suggestions from different angles: the first is to recommend unlisted waterproof enterprises that meet the listing conditions to be listed as soon as possible,because financing can promote the rapid expansion of waterproof enterprises,forming a positive cycle with the improvement of bargaining power and working capital management efficiency;Second,it is suggested that the listed waterproof enterprises should learn the management methods and measures of Dongfang Yuhong,especially pay attention to brand management,product quality and service quality;The third is to suggest that other enterprises should also formulate their own working capital management strategies in combination with their own industry background and business strategy.