Working capital management: Fasten your seatbelts, turbulence ahead

PwC Malaysia’s 2022 Working Capital Study

Key statistics

20%   51%   19%   21%

increase in Revenue



  increase in Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)

increase in Net Working Capital (NWC) days


  drop in Cash Conversion Efficiency (CCE)

About the study

In this edition of PwC Malaysia's Working Capital Study, we highlight the importance of Cash Conversion Efficiency (CCE) and the liquidity initiatives businesses can carry out to be more resilient in an increasingly complex environment. 407 listed companies across 14 industries in Malaysia were analysed in this study. Key themes that defined this financial year’s landscape are inflation, supply chain disruptions and Operational Restructuring.

Increase in Revenue and Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA)

Based on our analysis, we noticed an increase of 20%, in terms of Revenue for Malaysian companies, as demand from consumers increased in 2021 (FY21) from 2020 (FY20). EBITDA increased by 51% from FY20 to FY21 across 14 different industries.

Deterioration in Net Working Capital (NWC) days and Cash Conversion Efficiency (CCE)

Our analysis revealed an increase (i.e. deterioration) in NWC days among the companies studied. We found that NWC days stood at 52 days in FY20 and rose to 62 days in FY21. This illustrated that businesses have longer inventory holding periods, slowing their capacity to recoup cash at a faster rate.

Working Capital Management as an integral part of Operational Restructuring

4 out of the 14 industries analysed in Malaysia, which are energy & utilities, oil & gas, plastics & packaging, and transportation & logistics, faced higher debt to equity mainly due to the nature of their business which is highly capital intensive. This segment of the study further addresses how our Operational Restructuring services can help businesses navigate towards a positive working capital approach.

Do you want to know how to improve your organisation's working capital opportunities? Download the full report below to find out more.


Inflationary pressure on businesses and communities

The Russia-Ukraine war has caused a ripple effect on prices of commodities such as oil, fertiliser and wheat, which are essential for 7 out of the 14 industries that were analysed in this study. The war has also contributed to an increase in inflation rate to 4.4% in July 2022.

Supply chain disruptions are a catalyst for inflationary pressure 

Despite the COVID-19 pandemic subsiding globally, producers are still facing delays throughout the supply chain process, from attaining commodity supply right up to fulfilling customer demands. Disruptions in the supply chain have resulted in cost-push inflation for some industries. 

Operational restructuring remains a high priority for business 

Lengthier Accounts Receivable Days, which stood at a 5-year high at RM100 billion in FY21, is an indicator that companies should revise their operations strategy. Aligning operational duties to reduce Accounts Receivable Days can potentially improve company cash flow and working capital efficiency during the COVID-19 recovery period. 

Required fields are marked with an asterisk(*)

By submitting your email address, you acknowledge that you have read the Privacy Statement and that you consent to our processing data in accordance with the Privacy Statement (including international transfers). If you change your mind at any time about wishing to receive the information from us, you can send us an email message using the Contact Us page.

Contact us

Ganesh Gunaratnam

Ganesh Gunaratnam

Deals Director, Business Restructuring Services, PwC Malaysia

Tel: +60 (3) 2173 0888

Punya  Mittal

Punya Mittal

Deals Senior Manager, Working Capital Management, PwC Malaysia

Tel: +60 (3) 21731188

Abhishek  Biswas

Abhishek Biswas

Deals Senior Manager, Working Capital Management, PwC Malaysia

Tel: +60 (3) 21731497