The Discussion On The Relationship Between Efficiency Of Working Capital Management And Corporate Profitability Of Listed Corporation In IT Industry

Because of the world new technology revolution wave impact, our country with science and technology innovation as the main characteristics of the information technology industry is booming, be to accelerate the development of national science and technology and enhance the comprehensive national strength of the pillar industries. However, in front of the huge space of development, information technology also exist the narrow financing channel, low service efficiency of funds, and many other problems. Compared with other industry, information technology has a fast development, better economic benefit and industry correlation characteristics, it also has the characteristics of high and new technology industry of high investment, high risk, it also determines the enterprise information technology to achieve a higher level of working capital management. Therefore, how to strengthen the management of working capital, increasing the effective utilization of funds, so as to improve enterprise performance is in the process of rapid development information technology enterprise needed to pay attention to and solve the key problem.At present, in the theoretical and practical work, mostly selected cash cycle index to evaluate the efficiency of working capital management, the index only focus on the working capital of accounts receivable, inventory, accounts payable, not only cannot reflect the enterprise working capital management of the whole process but also cannot fully reveal the intrinsic relationship between each component project of working capital. This paper uses the evaluation system based on the channels management of working capital management performance that put forward by Wang Zhuquan and other scholars(2007).In the while of dividing the working capital into operating activities and financial activities of working capita, according to the classification methods of the channels, the management of working capital are further divided into procurement channel, production channel, sales channel of working capital. Using turnaround as evaluation index of enterprise working capital management efficiency, to explore the information technology industry listed companies working capital management efficiency and the relationship between the corporate performance, in order to find the ways of improving working capital management efficiency, and achieve the purpose of enhancing business performance.This paper reviews and comments on the domestic and foreign literature and defines the concepts, then uses literature research, standard analysis method to analyze the sources of working capital management efficiency and the relationship between the corporate performance and combining with the characteristics of information technology industry and puts forward information technology business activities of listed companies and its channel turnover period of working capital are negatively related with corporate performance, financial management activities of working capital turnover period are negatively related with corporate performance. This paper chooses Chinese listed companies in IT Industry up to December31,2011as samples, select four years2008-2011cross section data. With total assets return rate as the evaluation index of enterprise performance, with business operations and its sources of working capital turnover period as the evaluation of business activities and various channels of working capital management efficiency indicators, with financing channel turnover period of working capital as evaluation index of working capital management efficiency of financial management, the information technology industry listed companies based on sources of working capital management efficiency and make empirical analysis on the correlation of corporate performance. According to the classification of the SFC sample information technology companies can be divided into the computer, communications, and other electronic equipment manufacturing and information transmission, software and information technology services of two points in the empirical analysis samples, in order to explain in the industry with different characteristics based on the sources of working capital management efficiency and the relationship between the corporate performance.This paper through empirical analysis drawn conclusions are consistent with the assumption and put forward the following Suggestions. First, the IT industry in the listed company’s working capital management should be raised to the height of the entire channel and supply chain. Second, the IT industry listed companies can improve business performance by reducing operating activities and its working capital turnover channel ways.Third, the IT industry in the listed company should maintain a sufficient basis of liquidity and solvency on the financial activities of reasonable shorten working capital cycle, thereby enhancing business performance.Finally, this article illustrate the limitations of this study from a sample obtained, index selection, model building and other aspects, and made the future of the study about the efficiency of working capital management and corporate performance. Including this article, most of the current research is to study the linear relationship between working capital management efficiency and the correlation between corporate performance, and some scholars have proposed the existence of an inverted U-shaped relationship between the efficiency of working capital management and corporate performance, and pointed out that there is an optimal level of working capital point, enable enterprises to achieve the best performance, which is the follow-up provides a new perspective on the study of relationship between them.