Listen in to this podcast to hear strategic consultancy firm The Hackett Group share the results of their study Working Capital Efficiency: It’s Impact on Profitability and Operational Performance.
It reveals that a seven-day improvement in the cash conversion cycle adds up to 1% in sustainable EBITDA margin. For a company with an EBITDA margin of 5%, this is roughly equivalent to a 20% increase in profit. Organizations should take this into consideration when valuing the return on investment for a working capital optimization program and to gain support of operations leadership.
Run time: 10:46