Businesses face ever increasing pressure on costs and financing requirements as a result of intensified competition on globalised markets. When trying to attain greater efficiency, it is important not to focus exclusively on income and expense items, but to also take into account the capital structure, whose improvement can free up valuable financial resources.
Active working capital management is an extremely effective way to increase enterprise value. Optimising working capital results in a rapid release of liquid resources and contributes to an improvement in free cash flow and to a permanent reduction in inventory and capital costs, thereby increasing liquidity for strategic investment and debt reduction. Process optimisation then helps increase profitability.
The fundamental principles of working capital management are reducing the capital employed and improving efficiency in the areas of receivables, inventories, and payables.
The practical implementation of this system is, however, a challenging task due to conflicts inherent in cross-functional and cross-sectoral issues on the one hand and the high complexity of each optimisation measure on the other. PwC’ experts have implemented working capital management systems in many Czech and international companies across various industries. Make use of our experience and of our analysis of best practice approaches!
Phase 1 – Determination of potential
Objective: Determination of potential, definition of costs/benefits
Objective: Preparation of a concept leading towards the realisation of potential
Objective: Release of capital employed and better efficiency