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Cash & Liquidity Management
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The PwC European Working Capital Study

Cash release from the supply chain remains the biggest challenge

by Damien McMahon, Didier Vandenhaute and Martin Böhme, PwC, Finance and Treasury Solutions

The study shows that the 1200 European companies unnecessarily tie up €475bn in their working capital. It also reveals that little structural change has been made in relation to working capital. This article contains highlights of the study. A complete version of the study report is available directly from PwC.

In 2010 PwC conducted their Working Capital Management study for the third time. This year, the study aimed to understand how the global financial crisis and subsequent economic recession have affected the liquidity of corporates and the way they manage working capital. For this purpose, PwC analysed over 1,200 listed companies from 12 European countries. For each country the top 200 companies based on their market capitalisation were taken into account, and were grouped in 10 different industry categories.[1]

The study gives an indication of the current market trends in the analysed sectors and countries, and provides an initial external benchmark with peers. The key findings of the study are: