Research On The Financial Performance Of W Company Light Asset Operation Mode

Since the 1980s,domestic cosmetics companies have begun to spring up,and now they have entered a period of rapid development.Their market sales scale has expanded from 204.53 billion in 2010 to 336.061 billion in 2016.The growth rate exceeded 60%,ranking second in the global cosmetics consumption market,which is enough to show that its future development prospects are bright.As the cosmetics market is a free competition industry,with the foreign cosmetics brands continuous entry into the domestic market and the increasing strength of domestic cosmetics brands and strengths,competition within the industry tends to be intensified.The overall profitability of the industry is not optimistic.Facing the fierce competition,under the traditional business model,with production capacity and asset scale to achieve higher economic benefits,it can no longer conform to the industry development trend.How do companies improve their core competitive advantage and find an operating model that meets their actual development and to further promote the realization of value maximization,has become a top priority.This article selects W company,a representative company in the cosmetics industry as the research object,takes the theory of the value chain as an entry point,and explores successful cases in which the company continues to maintain profit growth and continuously enhance its value creation capabilities under the light asset operating model.First,after briefly introducing the basic situation of W company and setting out the distribution of its existing core assets,it summarizes the typical light asset financial characteristics presented on its balance sheet,namely:high proportion of current assets,high cash reserves,low proportion of accounts receivable and inventory,low proportion of fixed assets,and high proportion of non-interest-bearing liabilities.Secondly,from the aspects of product production,inventory management,technology research and development,marketing channels,and financing models,deeply explored the light asset operating model that W Company has developed in line with its own development,and analyzed the four major capability indicators system and cash flow analysis from financial analysis.Ten indicators were used to comprehensively analyze the impact of the light asset operating model on W company's financial performance.The analysis included a horizontal comparison with the industry average and PROYA,a heavy asset management company,to demonstrate the adoption of a light asset operating model will show better financial performance.Based on the above analysis,we sum up the case enlightenment that W company obtained through implementing the asset-light operation model,mainly including the following aspects:exploring and integrating potential assets,clarifying its core business scope,rationally planning and arranging working capital,and attaching importance to the construction of product marketing channels.As well as expanding the research and development of high-value-added services,it is expected that these valuable experiences will provide new directions and reference significance for other companies in the industry to explore operational models suitable for their own development.