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From startups to legacy brands, you're making your mark. We're here to help.
Serving the world's largest corporate clients and institutional investors, we support the entire investment cycle with market-leading research, analytics, execution and investor services.
Your partner for commerce, receivables, cross-currency, working capital, blockchain, liquidity and more.
Prepare for future growth with customized loan services, succession planning and capital for business equipment.
Providing investment banking solutions, including mergers and acquisitions, capital raising and risk management, for a broad range of corporations, institutions and governments.
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Whether you want to invest on you own or work with an advisor to design a personalized investment strategy, we have opportunities for every investor.
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By Gourang Shah
Global Head of Treasury and Working Capital, J.P. Morgan Wholesale Payments
By Varoon Mandhana
Senior Advisor, Treasury Solutions, Apac
By Vikrant Verma
Advisor, Wholesale Payments Solutions, Asia Pacific J.P. Morgan
By Gourang Shah , Varoon Mandhana , Vikrant Verma
J.P. Morgan’s 2021 Working Capital Index report provides treasury and finance professionals with insights into the working capital performance of the S&P 1500 companies in the past year. We also assess the impact of the pandemic outbreak across industries and focus on how companies can better manage liquidity risks going forward.
The report captures trends from the Working Capital Index, Cash Index and Cash Conversion Cycles (CCC) of the S&P 1500 from 2011 to 2020.
CCC helps in quantifying how efficiently a company is managing its working capital. It measures the amount of time it takes to convert inventory purchases into cash flows. CCC is represented as:
The Cash Conversion Cycle (CCC) is the number of days it takes to convert inventory purchases into cash flows from sales. The CCC is a metric that helps quantify the working capital efficiency of a company and is derived from three different components:
Top 3 industries showing deterioration in CCC in 2020 (Number of days the CCC lengthened by) |
Top 3 industries showing improvement in CCC in 2020 (Number of days the CCC shortened by) |
16.9 Airlines |
10.8 Semiconductor |
198 Aerospace and Defense |
6.6 Apparel Retail |
39.9 Oil and Gas upstream |
3.2 Media |
64% of companies in the S&P 1500 saw a deterioration in CCC of which:
- 86% showed a lengthening in DSO
- 87% experienced an increase in DIO
Top 4 industries with the highest rise in case levels in 2020
- Airlines: 50.6%
- Apparel and Accessories: 7.1%
- Apparel Retail: 5.8%
- Industrial Machinery: 5.5%
Top 4 industries with maximum growth expected during recovery (based on estimates in 2021 revenue)
- Semiconductor: 40.8%
- E-commerce: 33.0%
- Pharmaceuticals: 20.9%
- Technology Software: 20.6%
Growth in revenue during global financial crisis recovery (December 2008 – June 2011)
- 58.8% Companies with top-performing CCC
- (-13.2%) Companies with bottom-performing CCC
This material was prepared exclusively for the benefit and internal use of the JPMorgan client to whom it is directly addressed (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating a possible transaction(s) and does not carry any right of disclosure to any other party. This material is for discussion purposes only and is incomplete without reference to the other briefings provided by JPMorgan. Neither this material nor any of its contents may be disclosed or used for any other purpose without the prior written consent of JPMorgan.
This material has NOT been prepared by J.P. Morgan’s Research Department and therefore, has not been prepared in accordance with legal requirements to promote the independence of research. It is not a research report and is not intended as such. It is for distribution to institutional and professional clients only and is not intended for retail customer use.
Unless otherwise specifically stated, any views or opinions expressed herein are solely those of the individual author(s) and/or the specific Treasury Services area from which it originates and may differ from the views or opinions expressed by other areas of J.P. Morgan, including the Research Department.
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Investments or strategies discussed herein may not be suitable for all investors. Neither JPMorgan nor any of its directors, officers, employees or agents shall incur in any responsibility or liability whatsoever to the Company or any other party with respect to the contents of any matters referred herein, or discussed as a result of, this material. This material is not intended to provide, and should not be relied on for, accounting, legal or tax advice or investment recommendations. Please consult your own tax, legal, accounting or investment advisor concerning such matters.
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Notwithstanding anything to the contrary, the statements in this material are not intended to be legally binding. Any products, services, terms or other matters described herein (other than in respect of confidentiality) are subject to the terms of separate legally binding documentation and/or are subject to change without notice.
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