consumer packaged goods

Food products carry an inventory-to-shipments ratio of 0.82 against 1.48 for manufacturing overall. The inventory savings are already taken, so the remaining working capital sits in the order-to-cash cycle, not on the floor.

Inventory-to-shipments ratios of 0.82 for food and 1.89 for beverage and tobacco translate into very different working capital positions. The ratio is a cash number that most operations only read as a volume number.

Census data puts 51.8 percent of food manufacturing inventory in finished goods and 6.8 percent in work in process. The working capital is not tied up in production. It is tied up in everything that happens after production.