Strategy

2001 Working Capital Survey – Chart 34

WIRELESS 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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Sources: REL Consultancy Group, Piranha Web


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

WIRELESS COMMUNICATIONS
Overall Rank Company Name Prior Year Sales Cash Conver. Efficiency Days Working Capital Days Sales Outst. Inven. Turns Days Payable Outst.
CCE Rk. DWC Rk. DSO Rk. Turns Rk. DPO Rk.
3 PAGING NETWORK INC $990 16% 181 (233) 2 28 234 32 98 266 3
29 U.S.CELL- ULAR CORP $1,717 26% 40 8 84 44 444 15 212 44 195
170 WESTERN WIRE- LESS $835 17% 151 45 401 44 445 13 230 7 985
178 ARCH WIRE- LESS $851 13% 252 24 204 40 381 43 76 21 736
404 NEXTEL COMMUNI- CATIONS $5,714 3% 824 11 111 62 702 13 243 72 45
157 Industry Average $2,021 15%   -29   44   23   82  

Back to the 2001 Working Capital Survey