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”
| PHARMACEUTICAL & BIOTECHNOLOGY | ||||||||||||
| Over- all Rank | Company Name | Prior Year Sales | Cash Conver. Effic. | Days Working Capital | Days Sales Outst. | Inven. Turns | Days Payable Outst. | |||||
| CCE | Rk. | DWC | Rk. | DSO | Rk. | Ts. | Rk. | DPO | Rk. | |||
| 16 | AMGEN INC | $3,629 | 41% | 12 | 54 | 489 | 45 | 452 | 2 | 953 | 14 | 918 |
| 65 | SCHERING PLOUGH CORP | $9,815 | 24% | 53 | 37 | 313 | 42 | 415 | 2 | 970 | 42 | 213 |
| 77 | ELI LILLY & CO | $10,003 | 28% | 29 | 69 | 617 | 67 | 766 | 2 | 956 | 36 | 300 |
| 109 | MERCK & CO INC | $40,363 | 19% | 113 | 32 | 268 | 46 | 460 | 6 | 502 | 45 | 182 |
| 130 | QUEST DIAGNOS- TICS INC | $3,421 | 11% | 352 | (8) | 20 | 65 | 744 | 34 | 91 | 81 | 28 |
| 140 | BRISTOL MYERS SQUIBB CO | $18,216 | 25% | 46 | 82 | 728 | 74 | 835 | 2 | 946 | 34 | 341 |
| 169 | JOHNSON & JOHNSON | $29,139 | 21% | 77 | 70 | 625 | 56 | 622 | 3 | 889 | 27 | 543 |
| 194 | PFIZER INC | $29,574 | 21% | 80 | 73 | 659 | 62 | 701 | 2 | 954 | 21 | 760 |
| 319 | FOREST LABORA- TORIES INC | $882 | 16% | 186 | 73 | 658 | 31 | 268 | 1 | 994 | 32 | 397 |
| 446 | GENZYME CORP | $903 | 21% | 90 | 122 | 916 | 78 | 856 | 2 | 952 | 12 | 943 |
| 466 | GENENTECH INC | $1,278 | 21% | 81 | 127 | 928 | 58 | 651 | 1 | 996 | 14 | 915 |
| 534 | NOVARTIS AG | $20,281 | 20% | 101 | 130 | 938 | 73 | 830 | 1 | 986 | 20 | 787 |
| 544 | WATSON PHARMA- CEUTICALS INC | $812 | 11% | 333 | 80 | 718 | 65 | 745 | 2 | 964 | 58 | 94 |
| 573 | COVANCE INC | $868 | 8% | 512 | 67 | 604 | 67 | 769 | 20 | 150 | 13 | 927 |
| 750 | PERRIGO CO | $739 | 6% | 672 | 79 | 708 | 37 | 343 | 4 | 769 | 30 | 425 |
| 763 | CARTER WALLACE INC | $748 | 7% | 555 | 92 | 804 | 65 | 739 | 3 | 896 | 22 | 717 |
| 794 | AMERICAN HOME PRODUCTS CORP | $13,263 | 11% | 309 | 121 | 912 | 85 | 904 | 2 | 979 | 19 | 822 |
| 835 | MYLAN LABORA- TORIES INC | $790 | 16% | 182 | 155 | 967 | 86 | 906 | 2 | 943 | 8 | 974 |
| 837 | IVAX CORP | $793 | 10% | 402 | 120 | 909 | 66 | 747 | 3 | 905 | 26 | 566 |
| 865 | ICN PHARMA- CEUTICALS INC NEW | $645 | 14% | 217 | 153 | 965 | 114 | 976 | 2 | 965 | 38 | 267 |
| 963 | ALPHARMA INC | $920 | 8% | 540 | 162 | 973 | 103 | 957 | 2 | 938 | 26 | 555 |
| 994 | MONSANTO CO NEW | $5,248 | 1% | 890 | 206 | 992 | 138 | 989 | 2 | 982 | 40 | 251 |
| 481 | Industry Average | $8,742 | 16% | 95 | 69 | 5 | 30 | |||||
Back to the 2001 Working Capital Survey
