Working Capital: A Summary of Ratios by Industry, 2016

10 Pages Posted: 30 May 2017

See all articles by Luann J. Lynch

Luann J. Lynch

University of Virginia - Darden School of Business

Michael Guo

University of Virginia - Darden School of Business

Abstract

This technical note presents various working capital ratios from 2012 through 2015 by industry and for some well-known companies.

Excerpt

UVA-C-2388

Nov. 18, 2016

Working Capital: A Summary of Ratios by Industry, 2016

This technical note presents various working capital ratios from 2012 through 2015 by industry and for some well-known companies.

Working Capital Ratios

The operating cycle covers the time from when a company purchases inventory to sell to when it collects cash payment from its customers for the sale of that inventory. It is the amount of time a company takes to turn its purchase of inventory into cash received from customers. Several things happen during that operating cycle. The company purchases inventory, makes payment to suppliers for that inventory, sells that inventory to customers, and collects payment from customers. These events are depicted in Figure 1:

. . .

Keywords: cost conversion, operating cycle, cash conversion

Suggested Citation

Lynch, Luann J. and Guo, Michael, Working Capital: A Summary of Ratios by Industry, 2016. Darden Case No. UVA-C-2388, Available at SSRN: https://ssrn.com/abstract=2974103

Luann J. Lynch (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4721 (Phone)
434-243-7677 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/lynch.htm

Michael Guo

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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