Study On The Relationship Between Working Captial Management And Corporate Performance For The New OTC Market Listed Company

The new OTC market has experienced 10 years’ development history in China since its established in January 23, 2006. The number of its listed companies has experienced a rapid growth. As of December 31, 2015, the number has reached 5129, of which more than 90% of companies are medium small and micro-sized private enterprises. Because the market system is not sound, and the listed companies’ own quality is low, most companies face many problems such as the narrow financing channel, high financing threshold, unreasonable capital structure, low capital management level, and diluted consciousness of enterprise financial management, etc. Therefore, the paper starts with the most basic capital link of financial management, hopes to bring some help for the new OTC market listed companies to improve the financial management level through researching the relationship between the working capital management and corporate performance.The paper researches the relationship between the policy and management efficiency of the working capital and the corporate performance through researching the financial data of China’s manufacturing companies in the new OTC market from 2010 to 2014. The paper selects current assets ratio, current debt ratio and current ratio as the measurable indicators of working capital policy, current assets turnover, cash cycle and working capital productivity as the measurable indicators of working capital management efficiency, roe as the measurable indicator of the corporate performance. Meanwhile, the paper has disposed some indicators through calculating the differences and absolute values with their experience values of theory. These disposed indicators are respectively named as: current assets ratio distance value, current ratio distance value and asset-liability ratio distance value. They are used to deeply research their relationship with the corporate performance.Firstly, the paper expounds the background of the subject, the research purpose, significance and research methods, etc. Then it expounds the present research situation and relevant theories home and abroad of the working capital management and corporate performance. Through the situation analysis of the working capital management and corporate performance for the new OTC market listed companies, the paper found that the listed companies generally take a conservative investment policy and financing policy of working capital, and the ratio of investment and financing is high. The level of roe is generally low and trend to decrease year by year. In terms of management efficiency, most enterprises’ working capital management efficiency is low because of the low accounts receivable and inventory management level. Secondly, the paper use the econometric analysis software SPSS 18.0 to do empirical analysis, through the further empirical study it find that working capital investment policy too aggressive or too conservative is not conducive to the improvement of corporate performance. When the ratio of liquid assets tends to be 0.5 and liquidity ratio tends to 2, the corporate performance tends to be the highest. The radical level of the Working capital financing policy is positively correlated with the corporate performance. The Financing policy is more radical. The corporate performance level is higher. Also the paper concludes that the efficiency of working capital management play an obvious role in promoting the corporate performance. The listed companies should strengthen the management of inventory and accounts receivable. At last, the paper has concluded some conclusions and forecasted the research. Also, some suggestions have been raised to improve the working capitals’ management efficiency of Chinese manufacturing companies in new OTC market.(1) Optimize the structure of working capital.(2) Improve enterprises’ credit management system.(3) Improve the level of inventory management.