There’s a €1.1 trillion opportunity for companies across the world to release cash from one of the cheapest sources available. This is the core finding of a dedicated PwC review of the present global working capital arena.
Working capital is a barometer for how freely cash flows. In efficiently run businesses, cash is fluid. In others, cash becomes trapped in working capital (eg waiting for invoices to be paid), in turn restricting the company’s ability to grow. The ultimate aim is to keep working capital as low as possible without hindering the normal run of the operational business.
The PwC review over a ten-year period ending at 2015 year-end financial statements (the latest data available) reveals a working capital opportunity of £28 billion for 450 UK businesses collectively. The UK’s working capital performance has improved for two years running, with the existing working capital within businesses reducing in 2015 by £14 billion compared to 2014 (when it stood at £124 billion).