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2018 Working Capital Report

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The McGrathNicol 2018 Working Capital Report has been released. This report shows the average working capital cycle of 146 ASX listed companies across nine sectors, with a combined market capitalisation of $878 billion.

The following is a summary of the report:

  • The average working capital cycle lengthened by 0.5 days in FY18, translating to an equivalent of circa $691 million in additional cash being held in working capital balances.
  • Construction & Engineering, Building Products and Mining & Resources, were a few of the sectors which experienced strong market conditions in 2018.
  • The success of these sectors was from a mix of increased investment in residential & infrastructure projects and higher commodity prices.
  • Construction & Engineering showed the most significant improvement in average DWC (days working capital) in 2018 with a 4.6 day reduction. This was driven by faster customer collections and lower inventory, partially offset by shorter supplier payment cycles.
  • 84% of the sampled group grew in revenue during the year, however only 64% were able to translate this into EBITDA growth as increasing competition, higher energy and other input costs put pressure on margins.
  • Construction & Engineering, Media and Transport & Distribution experienced a structural “funding gap” where companies pay their suppliers more quickly than they receive payment from their customers.

To see a more detailed working capital report from each sector click on the appropriate link:

Building Products

Construction & Engineering

Food and Beverage

Healthcare Services


Mining & Resources



Transport & Distribution

At Ledge, we assist businesses with their working capital by putting appropriate facilities in place. To find out more contact your Ledge Finance Executive directly or contact us here.

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