2001 Working Capital Survey - Chart 4



Behind the Rankings

The management of working capital combines two measures, weighted equally:
1. Days of Working Capital (DWC) = (Receivables + Inventory ­ Payables) ÷ (Sales ÷ 365 Days). If payables exceed the sum of receivables and inventory, DWC is negative.
2. Cash Conversion Efficiency (CCE) = Cash Flow from Operations ÷ Sales.

The overall ranking: (Highest Overall CCE ­ Company CCE) ÷ (Highest Overall CCE ­ Lowest Overall CCE) + (Lowest Overall DWC ­ Company DWC) ÷ (Lowest Overall DWC ­ Highest Overall DWC). Days of Sales Outstanding (DSO), Inventory Turns, and Days of Payables Outstanding (DPO) are not part of the overall ranking criteria. Industry averages consider all companies in an industry, not just the top five.

Sources: REL Consultancy Group, Piranha Web

Back to "Forget the Float? — The 2001 Working Capital Survey"

Over- all RankCompany NamePrior Year SalesCash Conver. Effic.Days Working Cap.Days Sales Outst.Inven. TurnsDays Payable Outst.
148CONSOL ENERGY INC$2,09217%14439345444421030531401
182ARCH COAL INC$1,34214%22829251434262313429471
165Industry Average$1,71716% 34 44 16 30 

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