Improving liquidity and working capital

In Strategy and Transactions

Dynamic and disrupted markets, geopolitical uncertainty, and ever-growing corporate transparency are putting increasing pressure on companies’ liquidity and cash flows. We help companies free up cash via robust, scalable methodology.  

Related topics Strategy and Transactions

What EY can do for you 

Many management teams struggle to sustain good control over short-term cash flows and the working capital that drives them, leaving the business vulnerable to market and operational change.

Strong liquidity and working capital management improves the perception of a business and creates cash flow. This in turn supports strategic capital allocation goals and improves commercial and operational performance.

We have experience supporting the complete spectrum of companies, be it a successful business seeking to enhance shareholder value, or an organization experiencing a cash crisis. We help develop the three main ingredients of strong working capital management: identification of cash generating opportunities, cash flow forecasting, and visibility and control through our advanced data analytics techniques.

Strong liquidity and working capital management:

1. Improves the perception of your business          
  • Demonstrating effective management
  • Proving the quality of earnings
  • Underpinning valuation (while guarding against takeover)
2. Creates cash flow
  • Releasing cash from the balance sheet (the cheapest form of finance)
  • Creating capacity in tough markets
  • Creating investment capacity: acquisitions, new markets, marketing, training, innovation and other transformation
  • De-leveraging the business or improving shareholder yield
3. Improves commercial and operational performance
  • Building proximity to customers and suppliers
  • Improving commercial thinking across functions
  • Driving more effective processes
  • Identifying and managing risks quicker

We have a track record of identifying cash generation opportunities of between 5% and 15% of annual revenues. Our global network has delivered more than US$40 billion of increased cash flow for our clients over the last 10 years.

We have experience of building and analyzing cash flow forecasts to either clarify short-term liquidity requirements or help navigate medium- to long-term fund flows.

We use a wide range of analytical techniques to rapidly identify drivers of opportunity and areas for further focus, including using interactive digital visualizations. Our analytics identify, evaluate and communicate key issues to management and the wider business, and can be provided on an ongoing basis, hosted and managed by us.

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