In the three years following the financial crisis, the largest global companies experienced a strong rebound in sales growth. However, since 2011 this growth has slowed down considerably, indicating that a return to consistent growth will be harder to achieve going forward. While there are many factors that can affect a company’s ability to grow, we know that both cash and investment are essential to sustaining this growth.
Working capital remains an obvious and key source of cash, but relative working capital management performance has stagnated over the last five years. Companies that had focused on improving working capital immediately after the credit crunch have made little gains since then. This is despite the fact that our analysis shows that companies that have sustained working capital improvements have also outperformed in terms of EBITDA.
In our 2014 annual working capital survey, we explore how countries and sectors compare in their management of working capital, the levels of investment needed to fund the increase in working capital and how large the opportunity to release cash for growth really is.