2019/20 working capital performance assessment for Vietnam
listed companies studied across 15 sectors
net working capital employed as at FY18, 10% higher than FY17
decline in ROCE due to deterioration in cash conversion (*percentage points)
increase in C2C driven by inefficient receivables and inventory management
In the face of rapidly-changing business models and during the quest for top-line growth, cash and working capital are fundamentals that businesses can easily lose sight of.
With Vietnam continuing to be a booming economy and one of the beneficiaries of the trade war between US and China, the capacity to turn sales into cash quicker helps businesses to not only reduce operating costs, but also to have an ultimate competitive advantage and sustain profits.
In our 2nd edition of working capital performance assessments for top Vietnamese companies, our analysis shows that companies continued to have difficulty converting their sales into cash despite a robust top-line growth. More than USD 11.3 billion (~46% of 2018 net working capital employed by businesses) can be released through optimising the working capital performance of these companies.
improved their working capital performance between 2017 and 2018
deteriorated the most in 2018 in terms of C2C
in terms of C2C compared to other regions
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