Working Capital Management, Corporate Performance, and Strategic Choices of the Wholesale and Retail Industry in China

Table 1

Variable definitions.

Variable	Definition
Strategy variables
Capital investment efficiency
FTOP	Ratio of fixed assets to profit	((endingnetfixedassets𝑡+begninningnetfixedassets𝑡)/2)/totalprofit𝑡
FTUO	Fixed asset turnover ratio	sales𝑡/((endingnetfixedassets𝑡+begninningnetfixedassets𝑡)/2)
CTUO	Current assets turnover ratio	sales𝑡/((endingcurrentassets𝑡+begninningcurrentassets𝑡)/2)
Cost control
RME	Ratio of management expenses to profit	administrationexpenses𝑡/totalprofit𝑡
RFE	Ratio of financial expenses to profit	financialexpenses𝑡/totalprofit𝑡
RSE	Ratio of sales expenses to sales	sellingexpenses𝑡/sales𝑡
CTOI	Ratio of cost to income	totalcost𝑡/grossrevenue𝑡
Development capability
RGM	Relative gross margin	firm's grossprofitratio𝑡/averageofindustrialprofitratio𝑡
GF	Growth rate of fixed assets	endingnetfixedassets𝑡−begninningnetfixedassets𝑡−1/endingnetfixedassets𝑡−1
GSP	Growth rate of sales proceed	operationrevenue𝑡−operationrevenue𝑡−1/operationrevenue𝑡−1
Working capital
WC	Working capital ratio	currentasset𝑡−currentliability𝑡/currentasset𝑡
Working capital Influencing factors
Management efficiency of working capital
ITUO	Inventory turnover ratio	operationcosts𝑡/((endinginventory𝑡+begninninginventory𝑡)/2)
RTUO	Accounts receivable turnover ratio	sales𝑡/((endingaccountreceivable𝑡+begninningaccountreceivable𝑡)/2)
Growth opportunities
GSP	Growth rate of sales proceed	sale𝑡−sale𝑡−1/sale𝑡
Operational cash flow
OCF	Operating cash flow to total assets	operatingcashflow𝑡/totalasset𝑡
Fixed assets ratio
FA	Fixed assets ratio	fixedasset𝑡/totalasset𝑡
Firm size
SIZE	Size of firm	ln(totalasset𝑡)
Performance
ROA	ROA	EBIT𝑡/totalasset𝑡
Control variables
Steady of industry demand
IDU	Industry demand uncertainty	∑^𝑛𝑖=1industrialnetsales𝑖−industrialnetsales^2
Initial performance
ROA	Lag of ROA	EBIT𝑡/totalasset𝑡
Working capital structure and efficiency
Working capital efficiency
ITUO	Inventory turnover ratio	operationcosts𝑡/((endinginventory𝑡+begninninginventory𝑡)/2)
ARTUO	Accounts receivable turnover ratio	sales𝑡/((endingaccountreceivable𝑡+begninningaccountreceivable𝑡)/2)
Working capital structure
CA	Cash to current assets	cash𝑡/currentasset𝑡
RA	Receivables to current assets	endingaccountreceivable𝑡/currentasset𝑡
IA	Inventories to current assets	endinginventory𝑡/currentasset𝑡
SL	Short-term loans to current liabilities	endingshorttermloans𝑡/currentasset𝑡