Supply Chain Finance and Working Capital Efficiency in Chinese Listed Manufacturers

Abstract

Whether a firm's working capital looks efficient can depend heavily on how supplier-finance arrangements are disclosed and where their balances are classified, and this paper examines that dependence directly. The evidence is a hand-collected set of six consolidated firm-year observations for Haier, Lenovo and Midea, four of which carry a quantified supplier-finance balance. Three tools are applied to them: a decomposition of the cash-cycle proxy, a reconciliation of financing liabilities across captions, and a check of how far the results move when closing balances are replaced by period averages. At Haier the operating-cycle proxy fell by 6.43 days, yet its cash-cycle proxy barely moved. Lenovo disclosed a 32.51% rise in its supplier-finance balance even as its cash-cycle proxy lengthened by 7.18 days. Midea's cash-cycle proxy shortened by 2.33 days while its operating-cycle proxy lengthened by 17.61 days, a pattern from which no supplier-finance status can be read off. For Lenovo, 25.84% of the disclosed 2025 supplier-finance balance sat outside trade and notes payables, and folding that balance back in shifts the year-end cash-cycle proxy by 7.43 days. Programme scale, buyer financing and operating turnover thus behave as separate empirical quantities rather than one. The study offers completed descriptive evidence and an auditable accounting reconciliation instead of a population estimate of any causal effect of supplier finance, and the supplementary Haier observations further show how much the figures depend on reporting vintage and on management turnover conventions.