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27 aug 2019

Working capital trends in heavy duty industry

Thoughts

We’ve dived into the numbers and studied the working capital efficiency in the heavy duty industry. So, what are the main drivers of efficiency and do larger companies have better working capital? And what supplier segments have the strongest working capital performance? 

Get our conclusions and the study by downloading the PDF to the right.

The 87 companies in the study are supplying components to trucks or other heavy duty vehicles for on-road, off-road or marine industry.

In the study the working capital is built up from the accounts payable, accounts receivable and inventory, reflected by the KPIs DPO – days payables outstanding, DSO – days sales outstanding, and DIS – days in stock.

Our three main conclusions

When crunching the numbers, we came up with three main conclusions:

  1. Inventory turnover is the key contributor to working capital performance among companies within heavy duty industry.
  2. Size doesn’t matter – no relationship can be found between turnover and working capital performance.
  3. Suppliers in the on-road heavy duty segment generally show better working capital performance.