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Are you leaving cash on the table?

Working capital management report 2018

Managing working capital not only gives access to firms to the cheapest form of finance but also assists to uncover opportunities in other areas, such as operations, sales, procurement, finance and supply chain. Study of top 500 listed firms in India shows that there is an opportunity to unlock INR 1.8 trillion cash from improved working capital management. Moreover, analysis shows that firms who manage working capital well also fare well in other financial parameters like ROCE and margins.

Overview


Trends in Working Capital Management by Naveen Tiwari, Partner, Working Capital Advisory Services, EY

Working Capital Management Scenario of India Inc.

Top 3 sectors with the highest C2C in FY17

Compared to other regions, there appears to be a significant scope of optimizing working capital for India Inc. by adopting efficient working capital practicess

Impact of GST on working capital performance:

Managing the complexities and extracting maximum benefits from the working capital opportunities presented by the GST regime would be a key area of focus in the short-term

The overall cash opportunity for India Inc.

INR1.8 trillion

India Inc. has INR1.8 trillion of cash trapped in their balance sheets

Sector insights

Benefits of effective working capital management

Improved liquidity and credit profile

Higher return on capital

Reduction of interest expense

Improved customer service levels

Improved commercial and operational performance

Develop ‘Cash culture’ within the firm

Free up cash to fuel growth – capex, acquisitions

Positive impact on valuations

How we can help

EY’s India team of dedicated working capital professionals can help you identify, evaluate and prioritize realizable improvements to liberate significant cash tied up in working capital.

We assist organizations in their transition to a cashfocused culture and help implement the relevant metrics to prioritize focus on working capital. We also identify areas for improvement in cash flow forecasting practices and assist in implementing processes to improve forecasting and frameworks to sustain those improvements. In addition to increased levels of cash, implementation of working capital improvement initiatives results in significant economic benefits from productivity improvements, reduced transactional and operational costs, lower levels of bad and doubtful debts, and reduced inventory obsolescence.

EY - How EY can help

Why EY?

We are the largest practice worldwide, dedicated to helping clients drive rapid and sustainable release of cash from working

  • Averaging 20-25% cash flow improvements or 7-10% of Revenue
  • Deep industry, functional and financial expertise
  • Delivered more than $50 billion of incremental cash flow to clients
  • Highly tailored approach, not “off the shelf”
  • Backed by over 200,000 EY colleagues across the globe
  • Senior team with 130+ years of experience
  • Having worked in over 60 countries

Contact Us

Naveen Tiwari

Partner
Working Capital Advisory Services, EY,
+ 91 22 6192 0550

Bhavin Shah

Senior Manager
Working Capital AdvisoryServices, EY
+ 91 22 61923595

Sushant Chaturvedi

Manager
Working Capital Advisory Services, EY
+91 22 6192 2423