The Performance Appraisal And Improvement Of The Working Capital Management Of Y Company

According to statistics,the majority of enterprises in China are small and medium enterprises,and a large number of small and medium enterprises also provide a large number of urban employment for the whole society.As a core force,the importance of Small and medium-sized enterprises for the rapid development of the national economy is no doubt.At the same time,the slowdown in the global economic growth has also had a huge impact on China’s exports.With the gradual deepening of the reform of state-owned enterprises,Production capacity and innovation ability of small and medium enterprises have been significantly improved.As an important basis for the development of high-tech industries,high-tech enterprises play an important role in China’s technological innovation,economic development and promoting the combination of production,learning and research.Nation and local governments support the development of high-tech enterprises by tax relief and other policies.As an important part of enterprise financial management,working capital management is an essential part of enterprise development,and the major content of working capital management is the management and financing of capital operation management.With a high level of working capital management mode,the enterprise can not only maintain the basic capital requirements of production activities,on the premise of ensuring financial security,can also use a variety of means to reduce the cost of working capital,for higher capital efficiency and full role playing.As the most dynamic part of enterprise funds,strong liquidity,quick selectivity,turnover flexibility is the most outstanding several features of working capital.All in all,the stand or fall of working capital management,directly related to the basic survival of the enterprise,as well as the future profit and development.Therefore,the enterprise working capital management is a critical part of enterprise management.Firstly,this paper introduces the related theories of working capital management and then taking Y company as an example,analyses the problems of Y company.These problems are mainly related to three aspects including the company’s working capital scale,structure and process.For example,The scale of Y company’s working capital is very large,the profitability of current assets is low;internal structure of current assets is irrational,the holdings of monetary funds is too much,these reasons results in the waste of funds;The procurement channel has shortcomings in The management process,which leads to the phenomenon of out of stock.Then,the paper analyses causes of problems by working capita performance evaluation of Y company.Firstly,the working capital holding policy is too conservative and proportion of monetary funds is high,which results in increased business opportunity costs.Secondly,lacking a reasonable customer evaluation mechanism,the withdrawing speed of accounts receivable is slow.Thirdly,material inventory is short of the management of classification;fourthly,the way of investment is simple and not standardized.To solve the problems,the paper proposes some advice on the basis of the actual situation of Y company.Firstly,Y company should determine the best cash holdings on the basis of the cash holdings in recent years and this can optimize the company’s working capital structure,balance working capital allocation.Secondly,according to the actual situation of the customers,Y company should establish a customer evaluation management mechanism to classify the customer,prevent risks,accelerate the speed of acquiring funds.So that it can improve the management of accounts receivable.To solve the problems of the inventory management,Y company should use the method of ABC inventory classification management to manage the stock of materials in the warehouse,which can achieve the optimization of inventory management.While Y companies also should hire professionals to forecast sales of a quarter and reduce losses.Thirdly,Y company should establish a scientific investment decision-making mechanism to take full advantage of idle funds,and Y company should also improve the corporate credit rating system in order to reduce the financing risk.Fourthly,to solve the problem of out of stock,Y company can further improve the process of the original procurement channel and reduce the loopholes in process management.