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Working capital requirements

Managing liquidity through difficult times

As the pandemic is expected to spread across the country and is foreseen to take months before it can be effectively contained, the government imposed heightened measures to control the transmission of COVID-19. 

Across all sectors there is a rapid shift in working capital requirements, driven by disruptions in supply and demand. Normal lead times and restocking frequencies are prolonged, payment terms are extended and collection efficiencies are implemented.

We understand that difficult situations could put your business short of cash, as revenue streams are significantly affected, while bills continue to pile up. These issues make it clear that there is a need to take fast and decisive actions to protect working capital and cash position in these uncertain times.

We can help you conserve cash and optimize your working capital through:

  • Understanding and analyzing key drivers and components of working capital including policies and arrangements

  • Identifying key sensitivities impacting working capital requirements

  • Reviewing existing liquidity measures and providing potential options for initiatives to enhance near-term liquidity

  • Identifying improvement opportunities to preserve liquidity (i.e. cash conservation measures and rapid optimization of working capital) and assessing impact to cash

  • Applying data and analytics across cash flow and working capital components to assist management in decision-making

  • Providing support in account collections and management

  • Assisting in cleaning receivables portfolio through reconciliation and reallocation of misapplied cash

Signs to look for

 

  • Are you encountering problems in collecting receivables or facing increased level of customer arrears?
  • Are you experiencing payment pressures from creditors and suppliers?
  • Do you have long cash conversion cycle with significant cash locked up in receivables and inventories?
  • Are you facing difficulties in resolving payment and credit terms issues?
  • Are you seeing higher inventory obsolescence and spoilage losses?

Explore our Business Recovery Service

 

Contact us

Mary Jade T.  Roxas-Divinagracia, CFA, CVA

Mary Jade T. Roxas-Divinagracia, CFA, CVA

Deals and Corporate Finance Managing Partner, PwC Philippines

Tel: +63 (2) 8845 2728

Janesse C. Galicia-Dorado

Janesse C. Galicia-Dorado

Deals and Corporate Finance Director, PwC Philippines

Tel: +63 (2) 8845 2728

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