Financial indicators

Working Capital Ratios

1. Working Capital and Industrial Working Capital

The Working Capital enables the Group to evaluate the balance between inventories, what is owed by customers and what should be paid suppliers.

WC = Inventories + Receivables - Payables

To improve the WC, inventories should be reduced, short payment conditions with our customers should be negotiated and, in contrast, advantageous payment conditions with our suppliers should be arranged.

Working Capital includes

TOT-A300	+ Total Inventories
STOT-A300			+ Inventories - Gross
A31000				+ Inventory: raw materials
A34000				+ Inventory: work-in-progress
A37000				+ Inventory: finished and semi-finished goods
STOT-A390			+ Inventories - Write-down
A39100				+ Inventory write-down: raw materials
A39400				+ Inventory write-down: work-in-progress
A39700				+ Inventory write-down: finished and semi-finished goods
	+ Total Receivables
STOT-A410		+ Trade receivables
A41100			+ Trade receivables
A49100			+ Trade receivables - Write-down
TOT-A400		+ Other short-term receivables
STOT-A400			+ Other short-term receivables - Gross
				Excluding
A44100				- Income taxes receivable
A46100				- Dividends receivable
STOT-A490			+ Other short-term receivables - Write-down
	- Total Payables
L40100		+ Trade payables
L40800		+ Fixed assets suppliers
STOT-L400		+ Other short-term payables
				Excluding
L44800				- Income taxes payable
L46930				- Dividends payable

Industrial Working Capital

Industrial Working Capital = Working capital as stated above

EXCUDING Other ST receivables/payables and fixed assets suppliers

But INCLUDING:

A40160 - Advances paid to suppliers
L41160 - Advances received from customers

2. Working Capital Ratios

Sales and costs annualization should be computed as following:

On January month → Sales annualized (Sales A) = Sales on Jan. x 12
On February month → Sales A = (Sales Jan. + Sales Feb) x 6
On month M dated from March → Sales A = Σ (Sales on M month+ M-1 month + M-2 month) x 4

Due to structure effects, we don’t use the monthly Y-1 Sales.

From March, we used the last 3 months of sales = compatibility with overdues.

For these ratios, advances (paid and received) and transferred receivables (related to securitization) are not deducted.

2.1. Inventories

Inventories in days of VC + NVC = 365 * Inventories / - (VC + NVC Annualized) like sales calculations.

ST-CP-PM	VC = Product Market VC
R15400		+ Proportional costs of sales - Standard
R15410		+ Actual/Standard variance - Proportional costs of sales
R15430		+ Elimination of margin in inventories

ST-CNP-PM	NVC = Product Market NVC
R25490		+ Non-proportional costs of production
R25460		+ Period non-proportional costs linked to production
R25470		+ Absorption of non-proportional costs linked to production
R25410		+ Actual/Standard variance - Non-proportional costs of production
STOT-R258		+ Production depreciation - actual

2.2. Receivables

Total Receivables in days of Sales = 365 * Total receivables / Total Sales annualized
Product/Market (PM) Receivables in days of PM Sales = 365 * PM Receivables / PM Sales Annualized
Services Receivables in days of Services Sales = 365 * Services Receivables / Services Sales Annualized

2.3. Payables

Total payables in days of VC = 365 * Payables / - (VC PM + VC Services) Annualized
PM Payables in days of VC = 365 * PM Payables / - VC PM Annualized