The Research Of Working Capital Management Efficiency And Corporate Profitability

As the one of the most feasible factors in daily life to most enterprises, working capital is a very important area of orporate profitability. Corporate profits of a certain period is closely related to working capital management. Working capital management needs to follow the overall enterprise management objectives, to ensure the enterprise value maximization which is a long-term value target for the enterprise.Since the 90s of 20th century, working capital management research has made significant progress. The relationship between working capital and maximize enterprises value is one of the core areas to scholars. Based on theoretical analysis, foreign scholars get the result of a negative correlation between capital management efficiency and firm performance with the empirical study. Research on working capital management is rather late in China and related studies have focused on traditional indicators with less attention to work capital management on business performance. In fact, the entire enterprise can improve the operating capacity and profitability, based on assurance of efficient working capital management.According to the financial data of Shanghai and Shenzhen A-share listed stocks, I research the relationship between capital management efficiency and the company performance. Based on divided the listed companies capitalization into three groups as sub-samples by market, discuss the whether the size of enterprise working capital has impact on relevance between efficiency management and the corporate performance.The empirical results confirmed the article that cash cycle negatively correlated with company performance, accounts receivable turnover negatively correlated with company performance, inventory turnover negatively correlated with company performance, accounts payable turnover negatively correlated with company performance. Finally, with the relevant sample data into the regression model, empirical research on comprehensive analysis of the results obtained conclusion of this article. Combined with China's economic restructuring and special market economy, the article raises the question of how to enhance the efficiency of working capital management of some of the recommendations.