Working capital usage of growing companies increased by 26%
Of the five regions analyzed in the Growth Enterprise Working Capital Index, North America ranks second, behind Latin America and the Caribbean (LAC). 71% of North American growing businesses had access to working capital solutions in the past 12 months – the third-highest utilization among all five regions in the study, behind Latin America and the Caribbean and Europe . Nearly nine in 10 finance chiefs across the region said these solutions helped their companies secure favorable payment terms for new ventures. Growth companies in North America appear to experience operational efficiency benefits by using external working capital solutions for strategic rather than tactical purposes.
North America’s growing businesses are ready to continue improving operational efficiency through expanded use of working capital solutions. 90% of companies in the region plan to use some type of external working capital solution in the next year, a 26% increase over the past 12 months and the third highest increase.
These are just “Growth Enterprise Working Capital Index 2023-2024: North American Edition“A Pimmts Intelligence and visa cooperate. This version is based on a survey of corporate treasurers or treasurers at what Visa calls growth companies (those with revenues between $50 million and $1 billion). The report examines the working capital solutions that growing businesses can use to raise short-term cash or credit, the preferred uses of these proceeds, and the impact of these solutions on their operating efficiency and business performance.
Other findings from the report include:
72% of North American growth businesses that leverage external working capital say it improves their business metrics. Nearly nine out of 10 people achieved favorable payment terms for new business initiatives.
Achieving favorable payment terms when trying out new business initiatives was the most cited reason for North American growing businesses using working capital solutions, cited by 87% of respondents.
Outside of the fleet and mobility sectors, North American growth companies tend to use working capital solutions to manage cash flow above average.
Cash flow management enables companies to forecast expenses and develop investment strategies among other key operations, and external working capital solutions are critical in this endeavor. For example, growing businesses in the North American business travel space have high adoption rates of these solutions at 48% for anticipated cash flow gaps, compared to the industry’s global average of 28%. Growing businesses in the North American agriculture sector have the highest usage of working capital solutions for seasonal cash management.
In our study, all of the top-performing growth companies in North America’s fleet and mobility space and seven out of 10 healthcare top performers strategically leverage external working capital to grow and grow their businesses.
A quarter of North America’s top-performing growth businesses use working capital to cover anticipated cash flow gaps; however, North American agriculture and commercial tourism growth businesses use working capital for cash flow continuity reasons at a higher than average rate.
Growth companies in North America have been able to respond to the challenges posed by economic and financial headwinds, demonstrating market resiliency through the use of working capital solutions.Download the report to learn more about how North American growth companies are leveraging working capital solutions.
from Tech Empire Solutions https://techempiresolutions.com/working-capital-usage-of-growing-companies-increased-by-26/
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from Tech Empire Solutions https://techempiresolutions.blogspot.com/2024/01/working-capital-usage-of-growing.html
via https://techempiresolutions.com/
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