Company X Benchmark analysis – an introduction

     Why is working capital important?
     What´s in it for you and your company?

This benchmark gives an overview of your company’s working capital situation.

Every company needs to employ capital bound to the operations. However, the amount required is closely connected to the efficiency of the internal processes and can be optimized to ensure full utilization of a company’s assets. Cash released from working capital is directly linked to a company value – 100% of the released cash becomes available for other purposes.

Working capital build-up

Working capital can be found in both a company’s assets and liabilities. This benchmark focuses on capital tied up in the following areas (with relevant KPIs):

      Accounts receivable (customer invoices): Measured as the average credit days given to customers.

      Inventory (Raw materials, Work in progress and Finished goods): Measured as the average number          of days products are in stock.

      Accounts payable (supplier invoices): Measured as the average credit day the company has to pay            suppliers.

Purpose of this benchmark    

      To give an overview of the working capital situation and where the capital is tied up as well as your            performance against your peers.

      The first page contains a breakdown of the company’s net working capital to highlight where the                  capital is tied up.

      The following page presents KPIs for the benchmarked company and relevant peers. By comparing            the KPI performance to peers improvement potential can be identified.

Working Capital Management at Capacent

The Capacent working capital delivery approach – from business case to measured results – is proven through more than 300 working capital improvement projects in different types of companies, industries and countries. With our structured, fact based and hands-on toolbox we work with our customers from the board of directors to the factory workers to achieve a cash-oriented culture.

We work with working capital impacting processes such as:

      Order to cash – e.g. reducing invoicing delays, improving collection routines.

      Procure to pay – e.g. optimizing payment practices, improving negotiations for supplier terms and            invoicing logics.

      Order to delivery – e.g. improving inventory replenishment parameters, developing sales and                    operations planning.

      Reporting and KPIs – e.g. working capital dashboard with leading indicators.

Read the whole introduction by downloading our white paper here.