Do larger companies have better working capital?
A common hypothesis is that a company with high turnover should have better working capital efficiency. The high turnover company should be able to leverage its scale to improve working capital through for example more formalized, and therefore more effective, processes as well as better position for negotiations with both suppliers and customers.
However, a comparison of working capital efficiency contradicts that hypothesis.
One explanation to this could be that while larger companies have more processes in place, the increased complexity from wider assortment, larger customer and supplier base along with greater footprint, drives up working capital. This would emphasize the importance of continuous improvements in internal processes, regardless of company size.