In 2022, listed companies worldwide experienced a significant increase of +9 days in their Global Working Capital Requirements (WCR), reaching 72 days of turnover, which marks the highest annual rise since 2008. This comes after a +3 day increase in 2021. The most significant increases were observed in APAC (+10 days to 77 days of turnover, including +15 to 59 days in China and +2 in Japan) and Western Europe (+7 days to 68 days). North American and CEE firms saw a comparatively lower increase of +6 additional days of WCR. Factors contributing to this rise in WCR include slower growth, higher inflation, more non-payments, and the higher cost of financing. Consequently, businesses are allocating a greater portion of their financial resources towards operational expenses, leaving less room for investment, product development, geographical expansion, acquisitions, modernization or debt reduction.
Learn more here: https://www.allianz.com/en/economic_research/publications/specials_fmo/2023_03_16_WCR-and-Liquidity-Gap__AZ.html
