The Impact of Inventory Management on Enterprise Financial Performance: A Case Study of HLA Co., Ltd

Abstract

As China’s leading men’s wear brand, HLA’s unique business model has resulted in a relatively high inventory turnover rate. However, in 2023, its absolute inventory value remained as high as 8.19 billion yuan, accounting for 48% of current assets, creating a special phenomenon of “coexistence of high turnover and high inventory.” This inventory management situation directly affects the company’s capital occupation, cost control, and market responsiveness, making it imperative to systematically study its impact mechanism on the company’s financial performance. This study took the inventory management practices of HLA as its subject, delving into its impact on financial performance.
This research employed a mixed-methods research method, integrating qualitative and quantitative analysis, with the Just-In-Time (JIT) model from Cost Control Theory and the Joint Inventory Management (JMI) framework from Supply Chain Collaboration Theory serving as the core analytical lenses. By systematically analyzing Hailan Home’s financial statements and related operational data from 2020 to 2023 through qualitative interpretation and a Difference-in-Differences (DID) quantitative model, the study aimed to dissect its unique phenomenon of “coexistence of high inventory and high turnover”.The study’s objectives included: (1) To explore the impact of inventory scale on the profitability of HLA. (2) To explore the differential effects of inventory turnover efficiency on the operational capability of HLA. (3) To explore the specific effects of inventory risk control models on the solvency of HLA. (4) To explore the long-term effects of inventory-driven growth sustainability on the development capability of HLA.The research process involved an in-depth case analysis guided by the theoretical framework and the construction of a DID model to accurately identify the net causal effects of inventory management strategy adjustments.
Based on the empirical findings, this study proposes the following targeted optimization suggestions: (1) Use AI prediction models to optimize inventory control, reduce ineffective stock, and boost HLA profitability. (2) Build a collaborative supply chain platform for data sharing and decision-making to enhance HLA inventory turnover and operations. (3) Establish risk-sharing and capital management mechanisms to optimize capital structure and improve HLA solvency. (4) Promote a digital and brand-driven sustainable model with high-value product development to ensure HLA’s long-term growth.
In summary, througha systematic analysis integrating theory and empiricism, this study not only reveals the financial impact mechanisms behind HLA’s paradox of “high inventory and high turnover” but also proposes actionable optimization pathways across four dimensions: inventory scale, turnover efficiency, risk control, and growth model. These recommendations provide specific directions for HLA to improve its financial performance and serve as a theoretical reference and practical guide for other apparel enterprises facing similar challenges, holding significant practical importance for enhancing overall inventory management efficiency in the industry.

Keywords: inventory management, financial performance, cost control theory, supply chain collaboration theory

6717195003 Wang Xingkai, 2568 (2025). Advisor: Dr. Zhang Li, สารนิพนธ์ (Independent Study), The Impact of Inventory Management on Enterprise Financial Performance: A Case Study of HLA Co., Ltd, นำเสนอในที่ประชุมวิชาการ (Conference), The 18th National and International Academic Conference 2025, ปริญญาโท (Master’s Degree), บัณฑิตวิทยาลัย (Graduate School), Master of Business Administration, Finance and Accounting, Siam University, Bangkok, Thailand – มหาวิทยาลัยสยาม กรุงเทพมหานคร ประเทศไทย