Avoiding the cash squeeze: McGrathNicol Advisory releases annual Working Capital Report

Sefiani was delighted to assist McGrathNicol Advisory in the launch of its annual Working Capital Report for 2016 which profiles the working capital performance of over 100 ASX listed companies across nine sectors.

The report showed, on average, management teams were able to improve working capital cycles and release cash, freeing up about $370 million in working capital in the last financial year but it was only half of what was released in the previous financial year. While there was an overall release in cash it was clear that while some companies were making a concerted, focussed effort to improve cash flow and working capital management, many others were going backwards. In fact, working capital metrics rose in four of the nine sectors sampled and in 52% of companies profiled in the report.

When it comes to business, cash is king. The faster a company can turn working capital into revenue the better. Improved working capital management can reduce the cost of doing business and can increase the agility and confidence of the business when undertaking growth and acquisition opportunities. The report demonstrated that because of the clear divide between best and worst performers it can give those who get it right a material competitive advantage.

For more information, to watch an overview video of the findings or to download a copy of the report visit https://www.mcgrathnicol.com/working-capital-report-2016/.