A Research On The Influencing Factors Of The Working Capital Performance In Purchasing Channel

Working capital management is the main content of corporate finance, its importancehas been highlighted in the economic crisis, and the research of working capitalmanagement has also been paid unprecedented attention. Enterprises only make workingcapital in good management and operation; they can make sure the effective connection ofthe enterprise purchase, production and sales of each stage, the survival and developmentin the market competition. The survey on financial managers in1000U.S corporate madeby Charles Marks and Larry showed that, the time spent by the financial manager in themanagement of working capital would account for about one-third of full-time. At thesame time, the working capital account for a large proportion of the total funds, somecompanies can account for more than60%. As one of the highest degree of marketizationand most competitive industries in China, wholesale and retail trade industry has highshare of cost and large capital inputs in the purchasing chain, the purchasing managementwill directly affect the quality of the goods supply and inventory, speed of response tocustomer needs, and enterprise efficiency in the use of funds, thereby affecting their overallefficiency and operational decision. Therefore, from the perspective of channelmanagement, making a research on the influencing factors of the working capitalperformance in purchasing channel would have important theoretical value and practicalsignificance to improve China’s wholesale and retail trade business survival andcompetitiveness narrow the gap with foreign countries.Based on the theories of supply chain, channel management, transaction costeconomics and resource, this article use the working capital management performanceevaluation system based on the channel management to assess the working capital turnoverperformance of the purchasing, production and marketing channels respectively, with the reclassified working capital as the breakthrough point and associating with businessprocesses. On the basis of the analysis of internal and external factors influencingpurchasing channel working capital management performance, this article selects148listed companies in wholesale and retail trade industry from China’s Hu&Shen stockexchange as samples, which data includes the year2007to2010. This paper uses thesoftware SPSS16.0and Eviews3.1for curve regression analysis and multivariate linearregression analysis, with purchasing channel working capital turnover as the explainedvariable, the influencing factors as the explanatory variables, area, time and the companysize as the control variables. The empirical analysis gets the multiple linear regressionequation of the factors influencing purchasing channel working capital managementperformance, and then deduces the purchasing channel working capital demand forecastingmodel to provide basis for managers to develop purchasing plans effectively. The empiricalresults shows that the explanatory variables of the supplier credit management, purchasinggoods management, procurement personal quality (education) and the control variables ofthe company size, the east have significant linear relationship with the purchasing channelworking capital turnover. There is a negative correlation between the supplier creditmanagement, purchasing goods management and the purchasing channel working capitalturnover, the others are positively related. Through the analysis and empirical research onthe influencing factors of the working capital performance in purchasing channel,combined with business activities and purchasing channel working capital managementcharacteristic in wholesale and retail trade industry. This article puts forwards somesuggestions to enhance purchasing channel working capital management performance ofChina’s wholesale and retail trade enterprises, which include improving the quality ofcorporate procurement staff, strengthening the management of supplier credit period,choosing the right supplier and quantity, strengthening information infrastructure ofpurchasing channel and so on.