Singapore Working Capital Study 2017

Unlocking enterprise value through working capital management

In collaboration with SPRING Singapore

What is working capital?

Working capital is the cash tied up in the daily operations of a business. It is the lifeblood of any business and a measure of short term financial health. The longer the cycle is, the longer a business is tying up capital without earning a return on it.

Why does it matter?

In the face of declining revenues and today’s volatile economic environment, companies need to manage their liquidity positions carefully to ensure they have enough cash flow to stay in business. Interest rates are also steadily increasing; this means that every extra dollar tied up is becoming more costly and there is an increasing urgency for businesses, especially SMEs, to optimise their working capital.

About this study

In collaboration with SPRING Singapore, our second annual working capital study looks at the working capital performance of 1,020 public and private companies across 15 sectors in the country.

This year, we observed an overall 3% deterioration of NWC days year on year, mainly driven by a 2.9% increase in Days Sales Outstanding (DSO) and a 4.1% increase in Days Inventory Outstanding (DIO). In cash terms, this translates into an additional S$ 8.7bn of liquidity tied up.

The three key observations are explained below.

Industry performance

Different industry, different performance
  • 50% of the industries saw their working capital deteriorate year-on-year or struggled to maintain their performance and 10 out of 15 sectors registered a loss in revenue year on year
  • Companies that pro-actively manage their working capital are usually better equipped to manage business changes through more agile operations

Company size

Size matters
  • Small-sized companies showed stronger NWC performance; this is likely due to many of them being more active in managing their working capital as they have less cash to play with
  • Medium-sized companies struggle the most as they strive to secure the necessary funding to scale up their business operations

Management performance

Top working capital performers enjoy better business performances
  • The companies that have been able to achieve top quartile working capital performance have outperformed their peers across various key metrics, showing higher investment rate, getting paid 40% faster than bottom performers, and holding 4 times less inventory effectively demonstrating the impact of working capital efficiency well beyond cash

Explore the data

Gain an understanding of Singapore’s working capital performance landscape average, by industry and by company size, using our data explorer.

NWC days Display:

Useful resources for your business’ financial management needs

SME Centres

SMEs in need of financial management advice can approach any of the 12 SME Centres for free business diagnosis and basic advisory services on budgeting, cash flow management, and financial statement analysis. An initiative by SPRING Singapore and five trade associations and chambers, the SME Centres help local enterprises improve their capabilities, increase productivity and grow their business.

For more information or to book an appointment with an SME Centre business advisor, visit

SME Portal

SMEs can access financial management toolkits, business guides and best practices at the SME Portal – the first stop for business information. The Tech Depot on the

SME Portal also provides SMEs with easily adoptable technology solutions that can optimise their finance operations.

Visit for more information.

Contact us

Wee Tze Wee

Partner, Deals, PwC Singapore

Tel: +65 8218 6342

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