Strategy

2001 Working Capital Survey – Chart 8

COSMETICS
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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COSMETICS
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.
256 GILLETTE CO $9,295 15% 190 59 527 92 931 3 921 88 23
452 HERBALIFE INTER- NATIONAL INC $944 7% 568 44 396 13 109 3 917 7 980
461 AVON PRODUCTS INC $5,715 7% 590 43 387 34 297 4 792 28 507
603 PLAYTEX PRODUCTS INC $831 8% 495 73 656 58 645 4 730 21 721
606 ESTEE LAUDER COS INC $4,367 9% 462 76 689 48 503 2 980 20 763
680 ALBERTO CULVER CO $2,247 5% 681 66 601 26 206 2 933 34 354
866 INTER- NATIONAL FLAVORS & FRAGRANCES INC $1,463 16% 179 162 971 73 833 2 971 18 854
959 REVLON INC $1,492 -4% 988 93 809 69 788 3 894 23 658
991 APPLICA INC $749 -1% 965 175 982 102 955 3 895 23 679
653 Industry Average $3,011 7%   88   57   3   29  

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