Strategy

2001 Working Capital Survey – Chart 31

TOBACCO
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.

Drive Business Strategy and Growth

Drive Business Strategy and Growth

Learn how NetSuite Financial Management allows you to quickly and easily model what-if scenarios and generate reports.

Sources: REL Consultancy Group, Piranha Web


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

TOBACCO
Overall Rank Company Name Prior Year Sales Cash Conver. Effic. Days Working Cap. Days Sales Outst. Inven. Turns Days Payable Outst.
CCE Rk. DWC Rk. DSO Rk. Ts. Rk. DPO Rk.
54 UST INC $1,548 33% 22 79 710 17 142 1 998 37 277
276 PHILIP MORRIS COS $80,356 13% 256 48 437 22 172 3 854 16 878
318 R J REYNOLDS TOBACCO HOLD. INC $8,167 8% 498 30 253 4 42 5 659 4 996
703 UNIVERSAL CORP $3,402 6% 675 71 634 34 304 5 612 23 657
975 STANDARD COMM. CORP $1,106 1% 908 137 945 71 815 3 855 43 201
465 Industry Average $18,916 12%   73   30   3   25  

Back to the 2001 Working Capital Survey