Treasury Management Internation Logo

J.P. Morgan launches Working Capital Index

Published 

Singapore – J.P. Morgan today announced the launch of the J.P. Morgan Working Capital Index, which enables companies to benchmark their working capital performance against industry peers. By capturing and consolidating the working capital metrics from the companies listed on the S&P Composite 1500 index, it provides firms with valuable insights into the working capital performance of some the world’s largest and most influential companies. In addition to the launch of the new index, J.P. Morgan also published a report on working capital trends from 2011 to 2018.

“Industry benchmarking is typically the first step for many companies looking to optimize their working capital, but there are limited tools available to do this effectively, primarily because of the lack of access to reliable industry data. We developed the Index to help our clients identify inefficient use of liquidity within their organizations and explore opportunities to improve their internal sources of funding,” said Gourang Shah, head of Treasury Services Solutions for Asia Pacific at J.P. Morgan.

The analysis of the Index found substantial liquidity trapped within the supply chains of the S&P 1500 companies, with the potential to release an estimated $460 billion through working capital optimisation programs. The industries that have shown the most improvement in optimising working capital between 2011 and 2018 are utilities, consumer staples and logistics. Sectors that have been challenged over the same period include aerospace and defense, semiconductors and media, according to the report.

“The differences in working capital performances both across and within industries are driven by a myriad of internal and external factors and it’s important for companies to understand the drivers to formulate the best strategy to optimise internal liquidity. We view the J.P. Morgan Working Capital Index as a starting point to benchmark performance, guide action plans and monitor progress,” Shah added.

“In conversations with our clients, it is clear CFOs and treasurers are increasingly committed to improving internal sources of liquidity, given the rapidly evolving environment in which they operate. The J.P. Morgan Working Capital Index is designed to provide a credible benchmark for them to set specific and quantitative goals in their working capital strategy and execute accordingly,” said Sridhar Kanthadai, head of Wholesale Payments, Asia Pacific at J.P. Morgan.

Click here to view original report.

Most recent episodes

HSBC’s Sibos Spotlight: Investing in the Future – from Diversity to Green Deposits

In the final instalment of HSBC’s Sibos Spotlight, Eleanor Hill (TMI) invites Nadine Lagarmitte and Suraj Kalati (HSBC) to consider how corporates’ attitudes to...

25:12

HSBC’s Sibos Spotlight: The ESG Landscape – what every treasurer needs to know

In the third edition of HSBC’s Sibos Spotlight Podcast series, TMI’s Eleanor Hill invites Farnam Bidgoli (HSBC) to provide an in-depth overview of the current ESG...

16:24

The Path to Transformational Global Cash Visibility

Davina Bradley (CEVA Logistics) and Conor Deegan (CashAnalytics) join TMI’s Eleanor Hill to explore how treasurers can transform their cash visibility and forecasting within their business in a matter of weeks using a...

33:16

HSBC’s Sibos Spotlight: Embedding ESG in Trade and Supply Chains

In the second podcast from HSBC’s Sibos Spotlight series, TMI’s Eleanor Hill speaks to Surath Sengupta (HSBC) about embedding ESG into trade and supply chains....

20:58

Lost in Transaction: Overcoming Payments Pitfalls

From simple errors to duplicates, fraud and sanctions violations, there are a number of areas where payments can go wrong – especially in the real-time environment. In this podcast, TMI speaks to Andrew Ferrao...

34:25

HSBC's Sibos Spotlight: Central Bank Digital Currencies

The first edition of HSBC’s Sibos Spotlight series sees TMI’s Eleanor Hill joined by Mark Williamson and James Pomeroy (HSBC) to discuss the hot topic of Central Bank Digital Currencies (CBDCs). Our guests discuss...

25:48

Payments Vision 2025: The Inside Track

Wim Grosemans, Steven Lenaerts (BNP Paribas) and Wim Raymaekers (SWIFT) join TMI’s Eleanor Hill to outline their vision for the payments landscape in 2025. Our guests consider how recent developments such as instant...

28:21

Stepping Out from the Shadows

“Treasurers needs to step out of the shadows and into the sunshine in terms of their strategic contribution.” claims Zitah McMillan, Co-Founder and CEO, Predictive Black. In this podcast, hosted by TMI’s Eleanor Hill, our guest declares that the...

16:54

Why the ‘One Size Fits All’ Approach is Outdated - A Cash Segmentation Treasury Masterclass

With the ongoing low interest-rate environment and increasing regulatory change, it’s more important than ever for treasurers...

23:55

Instant Payments: Instant Rewards

TMI’s Eleanor Hill sits down in the virtual TreasuryCast studio with J.P. Morgan’s Global Head of Real-Time Payments, Cyrus Bhathawalla, to discuss how treasurers can capitalise on the evolving nature of real-time payments. Our guest contemplates the elements...

23:55