Latin American Companies Holding up to $46 Billion in Working Capital

Sponsored By REL

Topics:

Accounting > Working Capital

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Abstract:

Despite healthy economic growth in Latin America, companies there saw a 2.1% slump in their working capital performance in 2006 that translates to some $46 billion in excess working capital.
The information is based on an annual survey of working capital for Latin America’s largest 100 public companies (ranked by sales and excluding financials sector) conducted by REL and CFO Magazine.
The survey also revealed that Latin America’s days working capital (DWC) expanded from 36.9 days in 2005 to 37.6 days in 2006, the result of slowing growth in sales, poor forecasting performance and delays in collecting funds.
Latin American companies have been hindered by foreign trade partners that are overly reliant on them for cheap supplies and manufacturing. Becoming more of strategic partner with the US or other countries, rather than just a low-cost provider may be one way the region can rid itself of excess inventory, which serves to stretch out their working capital.

DETAILS

Sponsored by: REL

Posted: February 14, 2008

Length: 4 pages

Format: PDF (368 kb)

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