Working Capital Report 2018/19

Navigating uncertainty

Unlocking cash to shore up your business

Why it matters

Cash is the lifeblood of any company. It’s more important than ever for businesses to optimise this fundamental aspect of financial performance if they’re to maintain a steady course in these uncertain times. Given that working capital is the cheapest source of cash, nothing is more vital than having a cash culture and good liquidity on board.

If all the companies in our study were to improve their working capital efficiency to the level of the next performance quartile, this would represent a cash release of €1.3tr. This would be enough for global companies to boost their capital investment by 55% – without needing to access additional funding or put their cash flows under pressure.

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What’s the story?

Our study of the financial performance of the largest global listed companies over the past five years indicates that there are four challenges on the horizon:

1) Converting cash is becoming harder

While revenues are up by 10% on last year, this year we’ve seen a decline in companies’ ability to turn higher revenues into cash. 

2) Capital expenditure is continuing to decline

Capital expenditure (capex) as a percentage of revenues has plummeted during the last five years, suggesting that companies are managing cash flows by cutting investment. In the long run, this will leave companies under-invested, posing a threat to their growth. By optimising working capital, global companies can release the funds needed for continued investment without squeezing their cash flows.

3) The cost of cash is increasing

During the recent sustained period of cheap borrowing, the cost of cash may not have presented cause for concern. However, given the current outlook of fiscal tightening and uncertainty around global trade, now is the time for companies to shore up their balance sheets to be ready for all eventualities.

4) Working capital has improved only marginally – signalling a missed opportunity

The overall findings on companies’ Net Working Capital (NWC) performance reveal a small improvement this year of 0.4 NWC days. Companies have achieved this by turning the tide on Days Sales Outstanding (DSO) and Days Inventory On-hand (DIO) performance, both of which saw modest improvements of 0.1 and 0.7 days respectively – the first improvement in five years.

How does my company rate?

Find out how you compare with your peers in our interactive data explorer, with breakdowns by company size, territory and industry.


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How does my company rate?

Find out how you compare with your peers in our interactive data explorer, with breakdowns by company size, territory and industry.


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NWC days

How we can help

We help our clients to:

  • Identify and realise cash and cost benefits across the end to end value chain (commercial terms right through to transactional processing)
  • Optimise operational processes that underpin the working capital cycle
  • Implement digital working capital solution and data analytics
  • Achieve rapid cash conservation in crisis situations
  • Create a ‘cash culture’ and an upskilled organisation through our working capital academy
  • Roll-out trade and supply chain financing solutions.

Looking to unlock further value?

We've worked on a global report with Mergermarket which uncovers how the most successful companies have made M&A pay at every stage of their deal lifecycle by uncovering hidden value, including working capital. Our data has found that Tech, Media, Telecoms and Industrial Products and Services are the two sectors showing the best return performance after acquisitions. What is driving these growth achievements? What can other sectors learn from this? Download our report here.

Download the report

Contact us

Daniel Windaus

Partner, Working Capital, PwC United Kingdom

Tel: +44 7725 633 420

Stephen Tebbett

Partner, Working Capital, PwC United Kingdom

Tel: +44 7717 782 240

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