An Empirical Study Of The Impact Of Cash To Cash Cycle On Firm Performance

The ability of cash flow and working capital management attract great attention of scholars and managers.Since 1980s, there have been a lot of research on working capital management, but most of the scholars are of view of a single enterprise. With the increasingly complex market competition, enterprise's working capital management has been affected by many external factors, and other enterprises in the supply chain is one of the important factors.The importance of supply chain management has gradually attracted the attention of managers and scholars, and the success of the cooperation between the upstream and downstream enterprises has gradually become a part of the competitiveness of enterprises, upstream and downstream enterprises can achieve performance synergic by reaching long-term contracts, strategic alliances, so as to enhance the performance of the whole supply chain, and improve the performance of individual enterprises. Cash to cash cycle is the time of conversion of raw materials to market value, this tool reveals the meaning of the whole process of production activities across the enterprise, including not only the various activities of enterprises, such as procurement, storage, production and distribution operations, but also includes the external business operations, such as customer service activities.This index not only covers the efficiency of the working capital management, but also can be used to characterize the performance of supply chain management. The management of cash to cash cycle is bound to affect the performance of the company, so on this basis, this paper hopes to find out the relationship between cash to cash cycle and corporate performance.High end equipment manufacturing industry is the strategic industry of our country, Occupies an important position in the national economy and national defense construction, under the backdrop of'the new normal'of domestic economy and tough economic situation of international environment, the importance of high-end equipment manufacturing industry is more prominent. So this paper selects the high-end equipment manufacturing industry as the industry background, using empirical research methods to study the impact of cash to cash cycle on corporate performance. In order to select the index of company performance more scientifically, factor analysis method is used to select performance indicators, ratio of period expense,return on invested capital, cash ratio, the proportion of net cash flows from operating activities in revenue are used to indicate company performance.The study found that:(1) The cash to cash cycle is positively related to ratio of period expense;(2) The cash to cash cycle is negatively related to return on invested capital;(3)The cash to cash cycle is negatively related to the proportion of net cash flows from operating activities in revenue;(4)Cash to cash cycle is negatively related to cash ratio. On the basis of this, the paper puts forward the countermeasures for the management of the cash to cash cycle of high-end equipment manufacturing industry.