E&Y: $1trillion still tied up in working capital

Companies across the US and Europe have $1 trillion locked up in working capital which could be used to bolster liquidity.

The rate of improvements made to working capital performance had slowed from 63 per cent of companies in the US and 50 per cent of companies in Europe to 43 per cent of both regions, E&Y's report - 'All tied up' discovered.

Inventory levels increased in the US by 10 per cent and Europe, up four per cent in the final quarter of 2008, the study found.

The amount tied up in these businesses represents 6 per cent of sales. For every US$1 billion in sales, firms could decrease their working capital balance by an average of US$60 million.

Further reading:

All tied up