Hot on the heels of PwC’s annual global working capital survey is the first research looking specifically at working capital in companies in the Middle East. As with the global analysis, PwC showed that companies in the region have AED9.4billion (€2.29billion) currently trapped in working capital because “[they] have not reacted fast enough to the current economic environment”. The figure is equivalent to an increase in average net working capital of 4.6 days.
Coupled with the reduction of liquidity available from banks, Middle East companies have therefore seen an overall decrease in cash-on-hand. Consequently, PwC says, working capital management is now becoming a priority for businesses in the region.
The firm analysed publicly-available financial statements for 332 companies, across 8 ME countries and 16 industry sectors.