Monday, July 30, 2012

Excess Euros

Apparently European companies could do a much better job of managing working capital. According to recent research, European companies could free up €886 billion ($1.09 trillion) in cash by improving working capital. The report found that the best performing companies collect 16 days faster, pay 16 days slower, and have about one-half of the working capital of a typical company. And very few companies appear to be stellar working capital managers. Of the 925 companies examined, only 99 improved working capital every year for three years and no company managed to improve the receivables period, inventory period, and payables period each year.