Global companies could release €1.3 trillion from working capital to increase capital investment
- While company revenues are up by 10% on last year, the cash conversion ratio has declined by 6%, indicating that converting cash is becoming harder.
- An annual rate of 3.6% in declining capital expenditure is suggesting that companies are committing less cash to investments, which poses a potential threat to their growth in the long-term.
- Current monetary policy tightening, as well as uncertainty around global trade, is increasing the cost of cash to companies.
- 77% of small and medium enterprises (SMEs) experience slow payments from large corporates.
- Over a third of SMEs spend a moderate to significant amount of time and resources chasing large corporations for payment.
- The Navigating Uncertainty: 2018 Annual Global Working Capital Study can be accessed via <https://www.pwc.com/gx/en/services/advisory/deals/business-recovery-restructuring/working-capital-opportunity.html>.
- The report analyses the performance of 14,694 global firms, with revenues totalling €37.5 trillion.
- PwC’s working capital team analysed their respective working capital performance in receivables, payables, and inventories over a five year period.
- Please visit www.pwc.com/workingcapitalopportunity for more information.
Ryan SpagnoloPwC Global CommunicationsUnited Statesryan.email@example.com-
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