Research On Cash Flow Management Optimization Of Laker Electric

Cash flow is related to the survival and development of an enterprise.For an enterprise,the premise of its sustainable operation is to see whether there is a normal cash flow.In 2021,as the impact of COVID-19 continues to linger,China’s home appliance industry faces many challenges,such as flat domestic market demand,soaring prices of bulk raw materials,soaring international logistics costs,supply chain disruptions,and RMB appreciation.Despite this,China’s home appliance industry still showed strong development resilience,with the annual main business revenue achieving rapid growth,with the revenue reaching 1.73 trillion yuan,up 15.5% year on year.In this paper,Laker Electric Company as the research object,from the analysis of its cash inflow hand,through the domestic and foreign literature review,using the case study method to Laker Electric Company cash flow management optimization suggestions.Firstly,the basic situation of Lake Electric Company is briefly introduced,and the management status of the flow,velocity,flow direction and process of the cash flow of Lake Electric Company is analyzed in detail.Then the stochastic model is used to forecast the optimal cash holdings of Lake Electric Company.Secondly,after analyzing the results,it is found that Lake Electric Company has some problems,such as too fast expansion speed,large investment risk,high debt risk,low cash flow quality,slow cash flow rate,and great impact of exchange rate on income,etc.Based on these problems,the reasons are found,including low correlation between the company’s development and its cash flow management.The attention to cash flow management is not enough,the company’s capital structure is not perfect,the profit realization ability is relatively weak,the lack of cash flow risk identification mechanism.Finally,it puts forward the corresponding optimization countermeasures,including strengthening the awareness of cash flow management,improving the level of cash flow management,optimizing the capital structure,strengthening the business process management,strengthening the cash flow risk prevention.Through the research on cash flow management of Lake Electric Company,this paper can help the company to optimize its cash flow management system,achieve the effect of sustainable development of the company,and provide a certain reference for other small household appliance companies.