Pressure on the production line
€177 bn leaking
through poor working capital management
NWC days deterioration
is at a five year high
-5% in ROCE
between 2012 - 2016
We’ve seen a reduction in the Return on Capital Employed (ROCE) of global listed companies. Whilst profitability is at a 5 year high, leverage has dramatically increased, which has led to the aforementioned pressure on returns. Improving working capital management (WCM) can be the key to reducing debt burdens and improving returns.
In the same 5 years, CAPEX (as a % of revenues) has plummeted, as companies appear to be managing operating cash flows by cutting investment. In the long run, this will leave companies under-invested, which poses a threat to their growth. By optimising working capital global companies can release the necessary cash to fund investment while at the same time managing operating cash flows.
Director, Marketing & Communications
Tel: +30 210 8114386