Working Capital in Canada Handled Efficiently but there is Room for Improvement

Sponsored By REL

Topics:

Accounting > Working Capital

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Abstract:

Thanks to a robust economy and the growing reach of both sales and sourcing, Canada’s top 100 companies maintained their strong working capital performance in 2006.
Data from REL/CFO Magazine’s most recent survey reveals the days working capital (DWC) for Canadian companies deteriorated slightly from 20.5 to 20.9 (1.6%) in comparison to 2005, indicating that Canadian companies are still operating with high efficiency.
Canadian companies can look to their inventories for room to improve. While firms may be buying more stock at cheaper prices, this practice will leave them with more inventory on hand. Also, if companies collected cash more quickly, they could improve DSO. Tackling both working capital elements could potentially reduce DWC by an estimated $25 billion.

DETAILS

Sponsored by: REL

Posted: February 14, 2008

Length: 4 pages

Format: PDF (349 kb)

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