An Empirical Study Of Working Capital Management Policy In The Retail Listed Companies

The companies usually make working capital decision based on the working capital management policy to achieve the company’s working capital management objective. The companies should choose the scientific working capital management policies in order to achieve the relevant financial goals. Despite the important role of working capital management in corporate financial management, but in our country it did not get enough attention. In theory, the management of working capital lacks of adequate empirical studies of innovation theory, while in practice, in respect of working capital management abroad, most of listed companies in our country are relatively backward. They usually take up too much working capital and put excessive reliance on short-term liabilities, and have inefficient working capital turnover rate. Empirical researches on corporate working capital management policies not only compensate for the inadequacies of theoretical research, but also help enterprises to develop reasonable and scientific working capital management policies, to achieve the purpose of improving working capital management. Analysis on the working capital management policy has important academic value and practical significance.This paper described the background and significance of working capital management policy research, selected part of detail listed companies’ data during the period2005-2012as the sample, made descriptive analysis which reveals China’s retail working capital policies timed dynamic and the current situation of China’s listed companies in the retail industry, and at the last analyzed reasons. With the listed company data it uses multiple regression analysis method to study the impact of working capital management policies on enterprise performance.. Lastly, this paper used cluster analysis to divide all companies in the sample into different groups, and then analyze the results of the performance of different groups The evidence reflects that enterprise performance is closely related to working capital management policies, and the enterprise should adjust these working capital policies so that the enterprise could improve the enterprise performance.At the end of this article, it made four recommendations which help China’s retail listed companies improve working capital management policy. These recommendations are as follows:firstly, when increasing the size of total assets, the corporate should try to keep the ratio of current assets to total assets stable and strive to maintain a moderate working capital investment policy. Secondly, in order to ensure that the majority of current liabilities meet current assets demand, the corporate could insist on matching the duration and the amount of working capital as much as possible. Thirdly, strengthen the emphasis on working capital cycle efficiency, the pursuit of efficient working capital cycle policy. Lastly, working capital management policy formulation need combine industry characteristics and industry environment changes, and learn from other companies which have a relatively high level of management experience of working capital management policy.