European Working Capital Annual Review 2012

Working Capital: never been better

What the top performing companies are doing differently

The last few years have seen unprecedented economic challenges for today’s CFOs such as the Euro-crisis, double dip recessions and banking crisis. Cash has become an expensive resource becoming more and more difficult to obtain. But most companies have trapped cash sitting on the balance sheet and, as one of the cheapest sources of finance, it makes sense to squeeze as much cash as possible from working capital before seeking additional external financing. A move that reduces the need for financing and is likely to be looked upon favourably by lenders. As a consequence working capital management and cash flow forecasting are at the top of the agenda of CFOs and finance executives.

PwC has conducted European working capital management studies since 2009, analysing trends in working capital management and how this impacts profitability. This study highlights how companies can benefit from better working capital management, both in terms of access to liquidity and cash and also profitability.