An Analysis of Working Capital Management in S Company Based on the Value Chain

Weijia Li ()
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Weijia Li: Sichuan Agricultural University, Business and Tourism School

A chapter in Proceedings of the 2026 4th International Conference on Digital Economy and Management Science (CDEMS 2026), 2026, pp 164-175 from Springer

Abstract: Abstract Working capital management is central to corporate finance, directly affecting cash flow stability and market competitiveness. Taking S Company, a cosmetics and personal care enterprise, as the research subject, this paper analyzes its working capital management from 2019 to 2023 based on value chain theory. The study examines three internal stages, including procurement, production, and sales, along with two external dimensions: upstream suppliers and downstream customers. The findings reveal structural issues across the internal value chain: procurement excessively relies on supplier credit while maintaining insufficient raw material reserves; production recovers capital faster than it invests, yet suffers from poor management and inventory backlogs; sales face slow accounts receivable collection and high inventory levels, prolonging the cash conversion cycle. Externally, procurement amounts fluctuate with high supplier dependency, while downstream sales are overly concentrated, limiting management flexibility. To address these issues, this paper proposes optimization measures across internal process improvement, external collaboration, and supporting management systems. The study suggests that optimizing working capital management from a value chain perspective should focus on coordinating capital allocation across all stages. This research provides practical guidance for S Company and offers insights for similar enterprises.

Keywords: value chain; working capital management; S Company; cosmetics and personal care industry; turnover efficiency (search for similar items in EconPapers)
Date: 2026
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DOI: 10.2991/978-94-6239-699-9_19

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