Study On The Working Capital Management And Enterprise Performance Based On Empirical Data On Listed Company In Manufacturing Industry

The working capital is the most liquid corporate assets,the working capital continue to transform the form of assets from the monetary to the stock ,commodity and then to money in the enterprise business activities. During the cycle of the process of capital, fixed assets investment will recover , then companies achieve profotability and complish business development. So, the working capital is known as the blood of production and operation. According to the survey, the working capital management takes up two thirds of the time that corporate finance manager spends on working time. The working capital management is the most important financial management. According to a survey of 156 large enterprises in the Guangdong Province in 2005, the development of corporate has been severely restricted by tight liquidity. Strengthening the working capital management and improve business performance is an important issue.However, Studies on working capital management are carried out in China later, focus on liquidity and liability management, working capital holder policy and working capital financing policy, demanding for working capital requirment research and working capital management and performance quantitative research. In this paper, working capital management level of enterprises and working capital management and business performance analysis of the relationship are researched described analysis and multiple regression model through financial analysis in the management system. Then the operational capital management and business performance of empirical formula is given.In this paper, net working capital, net operating working capital and cash cycle are studied with adjusted balance sheets, income statement in a management point of view in Machinery and Equipment Manufacturing industrial in China listed companies from 2003 to 2010, and then by analyzing the correlation of they and ROE, we can find the working capital management have been greatly improved, is relative with company performance. But there is a large gap, compared with foreign advanced leve. And then, empirical study shows the level of working capital management indeed affects business performance, the shorter cash cycle is, the less working capital ruquirment needs, the better the business performances. Finally, the paper gives the measures to strengthen the management of working capital, and presents research prospects.