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1,000 of the biggest U.S. companies freed up $72 billion through improved efficiency


Last year, 1,000 of the biggest U.S. companies freed up about $72 billion through improvements in collecting bills, turning over inventory and stretching out the amount of time they take to pay their own suppliers, according to a survey by Hackett-REL, a unit of business-consulting firm Hackett Group that focuses on working-capital issues.

These companies reduced the amount of money they have tied up in working capital by an average 5.6% from 2004, according to the survey. Of the 82 industries surveyed, 45 improved their working-capital situation, while 35 worsened and the rest were unchanged from a similar survey in 2004.

U.S. companies are reaping the benefit of increased investment in software that helps manage their cash and treasury operations

Among sectors that registered the biggest improvement: cable broadcasters, which saw working-capital needs decline 46%; big oil companies, which posted a 45% drop; and marine-transportation companies, which had a 30% fall.

Reducing working-capital needs can lead to significant improvements in a company's overall cash flow. At machinery producer Caterpillar Inc., an 8% reduction in working-capital needs freed up about $2.4 billion in cash last year.

S&P 500 companies spent $100.2 billion on stock buybacks during the first quarter of 2006

$515 billion
Amount spent by S&P500 for stock buybacks during the last 18 months

$11.5 trillion
Total market value of S&P500 companies as of May 31, 2006

S&P 500 first quarter buyback activity has surged 22.1% over that of the first quarter of 2005, with the trailing 12- month increase at 55.2%. According to Standard & Poor's, S&P 500 constituents spent $100.2 billion on stock buybacks during the first quarter, placing it second all-time to the $104.3 billion set during the fourth quarter of 2005. 

In the year ended March 31, S&P500 companies spent a record $367 billion on so-called stock buybacks, an amount so large it could cover this year's Medicare budget, says WSJ. Some of the biggest buyers include:

  • Exxon Mobil Corp., Microsoft Corp. and Time Warner Inc. spent $14.37 billion combined during the first quarter. 
  • Cisco's plan to repurchase an additional $5 billion of its stock, on top of its earlier $35 billion repurchase plan.  
   

Continue reading... "S&P 500 companies spent $100.2 billion on stock buybacks during the first quarter of 2006" »

Starbucks Reports 23% Revenue Growth in May

Starbucks reported consolidated net revenues of $613 million for the four-week period ended May 28, 2006, an increase of 23% from consolidated net revenues of $496 million for the same four-week period in fiscal 2005. On a comparable store sales basis (stores open for at least 13 months), sales at Company-operated stores increased 7% for the four weeks ended May 28, 2006, as compared to the same four-week period in fiscal 2005.

For the 34 weeks ended May 28, 2006, consolidated net revenues were $5.0 billion, an increase of 23 percent from consolidated net revenues of $4.1 billion for the same 34-week period in fiscal 2005. Comparable store sales increased eight percent for the 34 weeks ended May 28, 2006, as compared to the same 34-week period in fiscal 2005.

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