Empirical Research On The Relationship Between Working Capital Management And Corporate Performance Of Architecture Industry

The Architecture Industry is the pillar industry of our national economy and play a decisive role in our national economy. By the practice of investigation, we know that Working Capital Management have a very important effect in the daily management of enterprises. Seeing that there are various problems in Working Capital Management of the Architecture Industry, such as the recovery cycle of Accounts receivable is too long and insufficient cash flow. These problems are likely to make the enterprises fail into financial distress. So the research on the Working Capital Management of the Architecture Industry has a very important significance. With the help of empirical analysis method, this article operates a empirical research on relationship between the Working Capital Management and corporate performance. On the basis of the empirical research outcome, I hope that I could put forward some suggestion to improve the level of Working Capital Management, and then to improve the level of corporate performance. The main contents of this article are as follows:Firstly, this article introduces the theory basis of Working Capital Management. Concretely, this paper described the concept, structure, effect, policy Working Capital Management.Secondly, this article have a global analysis on the situation of the Architecture Industry, and then analyzes the features and present situation of Working Capital Management in Architecture Industry, on basis of above theory of Working Capital Management.Again, this article choose the company in Architecture Industry that is listed on the Shanghai and Shenzhen A shares from2007to2011as the study object and use Eviews7.0statistical software for data regression to have empirical study on the relationship between the Working Capital Management and corporate performance from2007to2011. The empirical conclusion is:1.The significant negative correlation is found between the current assets ratio and corporate performance in Architecture Industry, high liquidity ratio shows that the enterprises are lack of profitability for idle funds; there is a significant positive correlation between current liabilities ratio and corporate performance, nearly two years progressively increasing current liabilities ratio shows that the enterprises fully enjoy the interest tax benefit, then reduce costs and improve the performance of company; The liquidity ratio is negatively related to corporate performance, the high liquidity ratio shows that the idle fund cannot find investment opportunity.2.Accounts receivable turnover rate is positively correlated with corporate performance, but not significant, a large number of accounts receivable cannot recover in time and have a negative impact on Corporate Performance; The significant negative correlation is found between the rate of inventory turnover and corporate performance, it is very common that the procurement of goods has great blindness and the company has a large inventory; Account payable turnover ratio is positively related to corporate performance, but not significant, this conclusion stems from the widespread arrears phenomenon.Finally, this article puts forward suggestion to improve the level of Working Capital Management of Chinese listing corporation of Architecture Industry.