Study On The Influence Of Iworking Capital Management On Profitability Under Financing Constraints

As we all know,working capital management has already become the core of the financial management of an enterprise.In the market economy environment,working capital is the capital which is most frequently used,its management quality and level will decide whether the enterprise can operate stably and orderly.The domestic capital market appears for a short time,and many places are not perfect.As a result,the cost of obtaining funds through external channels is far more bigger than the cost of obtaining funds through internal channels,thus resulting in producing the bondage of financing.The working capital management will be affected by the financing constraints,and the working capital management may be different when enterprises face different financing constraints.Therefore,listed enterprises are restricted by financing,and there is a specific relationship between working capital management and profitability.In this research process,we will focus on the impact of working capital management on profitability,and then judge the impact of financing constraints on the relationship between both of the two factors.First of all,this paper reviews the domestic and foreign literature from the perspectives of working capital management and profitability,financing constraints,financing constraints and working capital.And explore the financing constraints under the working capital management of profitability research blank.Secondly,according to the trade-off theory,information asymmetry theory and free cash flow hypothesis provide theoretical support for the research hypotheses and empirical analysis below.Thirdly,by using the logical regression model,the author constructs a comprehensive index to measure the degree of financing constraint,and on the basis of that,the author divides the financing constraint degree of the whole sample reasonably.This paper analyzes the influence of working capital management on profitability under different financing constraints.Finally,some practical suggestions are given based on the conclusion of empirical analysis.Through the empirical analysis,it is found that the relationship between the turnover period of working capital and the profitability of domestic listed enterprises is inversely U-shaped,that is,the existence of optimal scale of working capital makes the profitability of enterprises reach the maximum.The optimal working capital turnover period of enterprises with high financing bondage is shorter than that of low financing bondage enterprises,and the sensitivity of high financing constraint group to corporate profitability is higher than that of low financing constraint group.According to the conclusion,the author puts forward the following suggestions: first,it requires the management to study the working capital scale from the overall perspective and find out the best one.From the overall point of view,we should not only consider the various components of working capital,but also ignore the relationship between each other,second,in the face of different degrees of financing constraints,we should formulate reasonable and scientific working capital investment standards.Third,distinguish between high and low financing enterprises,focus on key working capital elements.The innovation of this paper lies in the fact that most of the researches in this paper use the univariate financing constraint index based on dividend payment rate when calculating the degree of financing constraint.The single index is more random and less stable when measuring the degree of financing constraint.Therefore,this paper uses the Logistic model to construct the comprehensive financing constraint index,considering more comprehensive factors,and using the comprehensive index to study the degree of financing constraints of different companies,which is more in line with the actual situation of our country.