Management SummaryStern Stewart Research

In times of crisis liquidity becomes significantly more important.
Volatile markets require more resilience and available financing can quickly dry up. Optimizing your net working capital provides you with the needed flexibility to release trapped cash shortly, to avoid covenant breaches and to steer your company in turbulent times.

Doing so is like playing chess. If you want to win the game, you don’t just need a holistic game strategy. Above all, you need to know what your chessmen are capable of, understand their interdependencies and efficiently divide them over the various phases of the game, and ultimately increase the pressure so that you don't lose control of the game.

As time can run out quickly, you need to have a playbook of measures that typically allows for NWC reduction up to 25%. And you need to know, which measures can help short-, mid- or long-term. Quick wins secure your company and help to start a proactive and bold NWC-strategy aiming at more flexibility and maneuverability of the entire supply chain. To win the game and protect your king. Cash is king.