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Working Capital Study 2020/21

Act Now to Recover

Navigating the months ahead

Why it matters

The coronavirus (COVID-19) pandemic has brought the importance of cash and working capital sharply into focus. As economies emerge from their initial lockdown periods, the route to recovery is unlikely to be smooth, and businesses need to be in the best possible shape for the journey. Economic conditions will most likely remain challenging for the foreseeable future. This means a laser-like focus on liquidity, including the optimisation of working capital, is vital to navigating the months ahead.

As economies come back to life, the drain on working capital will get worse before it gets better. Looking ahead, many of the ‘business as usual’ processes to manage working capital therefore need to be reconfigured to ensure success.

Explore our report to find out how you can prepare for the months ahead, and plot a successful course through future uncertainty.

Key findings

Overall debt ratios were the highest in five years going into the pandemic. However, companies saw working capital improvements at the end of 2019, which were fortuitous in light of the cash drain in Q2 2020.

The most significant shift in Q2 2020 is visible in inventory, where inventory holding days increased a further eight days, representing a swing of 15% year-on-year.

Four sectors in particular have suffered double digit increases in working capital days, including aerospace, automotive, hospitality and leisure, and industrial manufacturing.

Revenues for European companies have declined by 23% in Q2 2020 compared to the same quarter in 2019. Working capital performance has deteriorated by eight days in the same period.

As we manage through the COVID crisis, businesses need to reconfigure operational processes to ensure they are fit-for-purpose and can deal with increased uncertainty.

We can help you to

  • identify working capital and cash benefits across the end-to-end value chain 
  • optimise operational processes that underpin the working capital cycle 
  • implement digital working capital solutions and data analytics 
  • achieve rapid cash conservation in crisis situations 
  • create a 'cash culture' and upskill the organisation to adapt to the current situation 
  • roll-out trade and supply chain financing solutions


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Whatever your business challenges or industry sector, we’re available to help you find your best way forward. We can explore your options with speed, imagination and care to find sustainable solutions for you and your stakeholders.

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Contact us

Daniel Windaus

Daniel Windaus

Partner, PwC United Kingdom

Tel: +44 (0)7725 633420

Stephen Tebbett

Stephen Tebbett

Partner, Working Capital Management and Restructing Execution Managed Services, PwC United Kingdom

Tel: +44 (0)7717 782240