Strategy

2001 Working Capital Survey – Chart 11

FIXED-LINE COMMUNICATIONS
CFO StaffJuly 1, 2001

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.

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

FIXED- LINE COMMUNICATIONS
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.
18 TELSTRA CORP LTD $11,024 34% 21 21 181 66 753 26 115 50 134
38 QWEST COMMUNI- CATIONS INTER- NATIONAL INC $16,610 29% 28 41 370 60 673 17 178 33 379
63 BROADWING INC $2,050 23% 60 29 246 64 727 23 130 42 209
69 ALLTEL CORP $7,067 23% 63 33 282 57 629 4 794 33 368
78 CITIZENS COMMUNI- CATIONS CO $1,802 19% 114 16 141 52 565 35 90 39 256
156 SPRINT CORP $23,613 17% 142 41 369 60 679 15 206 32 388
239 VIDESH SANCHAR NIGAM LTD $69,872 14% 238 44 394 117 981 2,622 1 73 42
390 STAR TELECOMM- UNICATIONS INC $1,062 1% 876 3 55 52 563 850 4 31 412
890 MCLEODUSA INC $1,397 -7% 996 36 306 79 865 24 127 51 124
216 Industry Average $14,944 17%   29   67   402   43  

Back to the 2001 Working Capital Survey