The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Working capital improvements at Euro corporates

Working capital is a large component of corporate liquidity, accounting for close to 15% of sales and 20% of capital employed at Europe's top 1000 companies, according to a 2003 report by REL Consultancy, the financial advisors. Though net working capital for European companies is falling, says the report, there is still ?580 billion of cash tied up in business operations. Working capital is made up of operating cash, trade receivables and inventories ? it is the capital in these areas that CFOs are hoping to capture.

US corporates have been recognised as the first to exploit working capital management yet in terms of recent performance it is Europe (an average of 53.3 days working capital ? DWC - in 2003) that has been catching up with the U.S.(53.7 DWC). Europe registered a combined 9.7% DWC improvement in the last two years compared with a 5.0% improvement for the US.

Two reasons for the improvement in working capital, according to the report, are a significant drop in inventories (Days Inventory Outstanding down 2.6% in 2002 and 3.4% in 2003) as well as a drop in receivables (Days Sales Outstanding down 0.4% in 2002 and 1.9%

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree