While the recession inspired big gains in the working capital metrics of U.S. companies in 2009 and 2010, since then progress has stalled, according to consultancy REL.
Working capital measures the extent to which a company's liquidity is tied up in its receivables, payables and inventories. When the economy slowed, companies were motivated to squeeze as much liquidity out of those areas as they could.
"During the recession, working capital dramatically improved," said Dan Ginsberg, an associate principal at REL, a division of the Hackett Group. Companies increased the speed at which they collected from their customers, extended the amount of time they took to pay their own bills and reduced their inventories, he said.
Continue Reading for Free
Register and gain access to:
- Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
- Informative weekly newsletter featuring news, analysis, real-world cas studies, and other critical content
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
*May exclude premium content
Already have an account?
Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Susan Kelly
Susan Kelly is a business journalist who has written for Treasury & Risk, FierceCFO, Global Finance, Financial Week, Bridge News and The Bond Buyer.
