EY Sustainable Cash

Sustainable Cash

Can you afford to ignore the cash agenda?

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A recent EY survey of the top 2,000 US and European firms showed that a staggering $1.3tn remains unnecessarily tied up in working capital – equivalent to a cash sum of nearly 7% of sales.

A transformational opportunity

Invest in growth

More cash enables increased investment in acquisitions, plant and equipment, and can accelerate entry into new market segments and geographies. Cash injected into marketing, training, innovation and R&D can lead to significant increases in sales and productivity.

Improve market perception

Companies that manage their balance sheet and cash flows effectively can borrow less, invest more and repay debt sooner, increasing efficiency and agility. Strong cash flow management improves the quality of earnings, underpins market valuation and leaves companies less vulnerable to corporate takeover.

Reduce cost of capital

Cash released from the balance sheet is a company’s cheapest form of finance. With interest rates likely to rise, is this an opportunity that can be missed?

Globally we have identified over $25bn of cash improvement opportunities for our clients

For many, this is a multi-million dollar opportunity, as we typically uncover 5–20% of annual turnover as cash release opportunities. Our approach has been refined over many successful years working with Private Equity companies to transform their investees’ cash and working capital performance.