Strategy

2001 Working Capital Survey – Chart 33

TRAVEL
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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TRAVEL
Overall Rank Company Name Prior Year Sales Cash Conv. Efficiency Days Working Cap. Days Sales Outst. Inven. Turns Days Payable Outst.
CCE Rk. DWC Rk. DSO Rk. Turns Rk. DPO Rk.
34 SOUTH- WEST AIR- LINES $5,650 22% 72 (6) 30 7 69 37 86 18 834
101 ALASKA AIR GROUP $2,177 15% 207 4 61 13 110 20 147 19 800
105 UAL CORP $18,027 15% 188 10 94 24 187 28 107 22 716
124 AMR CORP $16,644 15% 191 19 157 28 227 13 235 24 654
132 AMERICA WEST HOLD. $2,344 13% 275 4 63 20 163 25 123 23 673
173 AMTRAN INC $1,292 13% 259 21 185 14 119 17 182 4 993
223 NORTH- WEST AIR- LINES $10,276 10% 411 16 140 23 183 15 203 21 742
251 US AIRWAYS GROUP $9,269 10% 412 24 201 15 122 11 270 11 946
143 Industry Average $8,210 14%   11   18   21   18  

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