Benchmarking working capital management in the inter-organisational context

Miia Pirttilä, Sari Viskari, Lotta Lind and Timo Kärri

International Journal of Business Innovation and Research, 2014, vol. 8, issue 2, 119-136

Abstract: This paper benchmarks working capital management in the inter-organisational context by applying the financial value chain analysis method. The method extends the value chain analysis to industry level. Working capital management is studied in ICT, pulp and paper and automotive industries with the cash conversion cycle (CCC). The CCC of these industries is approximately 40, 60 and 70 days, respectively. The difference is mainly a consequence of the different cycle time of inventories. The 2008 financial crisis affected the working capital management of the industries similarly. Both the cycle time of accounts receivable and accounts payable increased between 2008 and 2009. Inside each industry, the CCC of the branches of the industry varies. The difference of the CCC between the branches that have the shortest and the longest CCC is six-fold in the ICT industry, two-fold in the pulp and paper industry and three-fold in the automotive industry.

Keywords: working capital management; cash conversion cycle; CCC; financial value chain; financial crisis; ICT industry; pulp and paper industry; automobile industry; inventory cycle time; automotive value chain. (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijbire:v:8:y:2014:i:2:p:119-136

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