The Empirical Study Of Working Capital Managerial Policy Of Chinese Listed Companies

Working capital management is a sector of short financial management, referring to company's decision-making of short-term investment and financing, permeating every sector of enterprise's daily production and operation. No working capital, no company's operation. At the same time, advanced working capital management is the basic qualification to an enterprise' subsistence, and we must rely on scientific working capital policy ensuring the realization of working capital managing aim. There many companies in our country have not established working capital policy mechanism, and didn't have stable and rational working capital policy. The theory and experience of working capital policy in China is obviously short comparing to that in the developed countries. Most of the studies of working capital management are about single part, not the whole system. In practice, there are many listed companies in our country have not established working capital policy mechanism, and didn't have stable and rational working capital policy. Therefore, the study about working capital management of Chinese listed companies is fairly significant. It can help us to discover the problems in Chinese listed companies' working capital management, and it can instruct the improvement.The study utilizes four means such as literature analysis, description statistic analysis, multivariable linear regression analysis, correlation analysis .There are three contributions of this paper: The paper researched working capital policy difference between industries and difference between countries, confirm the peculiarities of Chinese listed companies' working capital policy; Through the analysis of practical basis, constructed models of working capital policy determinants and the relationship between working capital management and corporation's performance; According to the empirical examination, the study got the determinants of working capital policy and the conclusions that there is no obvious correlation between working capital management and corporation's performance, which give complementarity to the prevenient studies.The paper begins with the definition of working capital, analyzing the nature of current assets and current liabilities and the content of working capital policy, discussing the balance between working capital and liquidity, profitability and the risk, the influence of working capital management to the corporation's performance. Through the empirical analysis, it indicates the traits of the current asset and current liabilities of Chinese listed companies in 2005. Comparing to American companies, we know the gap of the working capital policy between China and the developed countries. The conclusion is that listed companies' current assets ratio and current liabilities ratio in China is too high, and the turnover of working capital is longer than the advanced level of the same industry. According to the multivariable linear regression analysis, it gets the determinants of working capital policy. And it verifies the influence of working capital management to the corporation's performance through the correlation analysis. The paper points that current assets ratio, current liabilities ratio, current ratio and working capital turnover have no obvious relation with corporation's performance as a whole. From the angle of industry, working capital turnover of real estate, excavation and electric power have obvious relation with corporation's performance because of their selves' characteristic. At last, the paper gives some advice to the establishment of working capital policy, such as reestablish working capital policies, building up correct working capital control idea, confirming rational working capital count, reducing the occupancy of working capital, shortening working capital turnover, reinforcing financing management in order to bring some references to the working capital management theory and practice.