Fuelling growth through working capital

Mark O'Sullivan Mark O'Sullivan

Top-performing organisations are continuing to find ways to optimise working capital to fuel growth despite uncertainty.

Macroeconomic uncertainty has felt like a permanent fixture in recent years and as Brexit negotiations commence, this looks set to continue for many years to come. However, the old adage that ‘cash is king’ still rings true and if these macroeconomic factors are going to affect UK corporates, it is the ultimate cash flow impact that will be hurt the most. It is therefore vital that organisations put working capital at centre stage.

The Grant Thornton Working Capital study analysed the year-end working capital position of 3,081 UK businesses, looking at performance by company revenue size of at least £100 million and across ten sectors.

The research revealed that £136 billion in cash is tied up in working capital on the balance sheets of UK corporates, with large corporates under-performing against their small and medium-sized peers in year-on-year working capital and profitability trends. Our study also highlighted that size nor sector are a barrier to driving transformational cash release from working capital.

Key questions organisations should ask when considering their working capital optimisation strategy include:

  • Should working capital improvements be an immediate strategic focus point for management? Without this focus, do you risk being left behind?
  • The role that size plays in prioritising working capital optimisation. Who is leading the charge and setting the standards?
  • What are the myths and realities around sector working capital requirements?

To understand how top performers are harnessing working capital through supply chain finance, process automation and data focused solutions; and harness the opportunities you can gain from cash optimisation to stay ahead of the pack, download the UK Working Capital study.

For more information on working capital advisory contact Mark O’Sullivan