The Correlation Study Between Working Capital Management And Enterprise Performance In Automobile Manufacturing Industry

Working capital management is the management of enterprise current assets and current liabilities. To maintain the normal operation, it is necessary for an enterprise to have the right amount of working capital. At the same time, working capital management is an important part of finance management in an enterprise. Up to now, there are many research related to working capital management in an enterprise. Up to now, there are many research related to working capital management at home and abroad, but only a handful research for our country’s automobile manufacturing industry listed companies. In recent years our country’s automobile manufacturing industry is increasing rapidly, becoming the world’s major car producer and consumer countries, and its position as the pillar industries is becoming more and more important.In the economic crisis, some automobile manufacturers are on the verge of bankruptcy due to funding breaks, However, by strengthen management of working capital, rational management of business inventories, speed up the recovery rate of accounts receivable, reduce cash inventory and improve efficiency in the use of funds, some enterprise maintain an invincible position in the fierce competition. It is of great theoretical and practical significance to understand the management of working capital situation of our country’s automobile industry and analyze the working capital management status and management policies to the domestic automotive industry.Firstly, the article interprets the concept and classification of working capital, the content and objectives of working capital management, details the structure and management efficiency and explores how to achieve the goal of working capital management, analysis the relevance of working capital management and business performance, and summarizes the contents of working capital policy and its development trend.Secondly, we have collected related information on working capital management over the past decade of our county’s listed automobile companies analyzes and summarizes the characteristics of working capital management and the trends of business performance for the listed automobile companies. Meanwhile, we understand the overall level of working capital management of our country’s automotive industry.Thirdly, we analyze the company’s operating performance from the working capital management’s structure and efficiency. With current assets and current liabilities on behalf of working capital structure, and accounts receivable turnover, inventory turnover, accounts payable turnover on behalf of working capital management efficiency ROE on behalf of business performance. By making multiple linear regression, we analyze the relationship between the level of working capital management and business performance.Finally, to make better policy on working capital of our country’s listed automobile companies we make some proposals according to the results.