Strategy

2001 Working Capital Survey – Chart 27

PHARMACEUTICALS & BIOTECH
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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Sources: REL Consultancy Group, Piranha Web


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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  

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