The Correlation Study Between Working Capital Management Strategy And Enterprise Competitiveness,Enterprise Business Performance

Both working capital management activities which are the direct objects offinancial management and financial management activities have been seriouslyaffected by the deteriorating global economic environment since2008. Sometraditional working capital theories are not suited to the development for workingcapital further study, for example, the definition of working capital, which is useful inevaluating the liquidity and solvency of the corporate assets, is of little use inclarifying the principle of working capital management and distinguishingresponsibilities in management, so further development in working capitalmanagement practice is obstacled by such similar defects.In order to reveal the mechanism of the working capital management and enrich thetheoretical foundation of working capital management, this paper carries out workingcapital management study from the prospective of introducing the new concept ofchannel management theory and international financial reporting. By thereconstruction of the concept of working capital, working capital management focusis transferred from the transfer of liquidity to the integrity and coordination ofmanagement and the correlation between working capital management and thecreation enterprise value is more clearly clarified. By the reconstruction of theturnover of working capital, it becomes more easily to evaluate the efficiency ofworking capital management. By introducing the new presentation view of financialstatements of IASB and FASB, it can help us to grasp the development direction ofthe future and evaluate working capital management efficiently.The article uses a combination of theoretical analysis and empirical analysis andselects the listed manufacturing companies in China from2008to2010as the data totest the correlation between working capital management strategy and enterprisecompetitiveness, enterprise business performance. We draw the conclusions asfollowing: Enterprise Competitiveness is significantly affected by working capitalturnover period with positive correlation, that is, the longer the working capitalturnover period is, the stronger competitiveness the enterprise has. Enterprise businessperformance is significantly affected by working capital turnover period with positivecorrelation, that is, the longer working capital turnover period is, the better businessperformance the enterprise has. The correlation between enterprise value and workingcapital turnover of investment activities is uncertainty. Finally, this paper analyzes thereason of the conclusions and gives recommendations, which are useful in providing atheoretical basis on improving working capital management for further researchingand helping to promote enterprises to adopt suitable working capital managementstrategies to enhance enterprise competitiveness and enterprise performance.The innovations of this paper are: First, the innovation of the research perspective.The article combines the supply chain theory, the working capital management theoryand financial presentation ideas of the IASB and FASB. Secondly, the concept of working capital and turnover of the working capital have been reconstructed. Finally,new assessment on substitution variable of working capital management efficient hasbeen put out. There are also certain inadequacies; for example, the sample intervalselected is too short, the concept of working capital and the concept working capitalturnover of the article used in the empirical study are used for the first time.