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Sarbanes-Oxley News & Developments
The 2003 Working Survey Results / Companies Barely WorkingWas it the economy, or too much focus on Sarbanes-Oxley compliance?
> > Maybe they were preoccupied with governance issues. But U.S. companies blew some good chances last year to generate cash via working capital improvements. That was the primary conclusion of CFOs annual working capital survey, conducted by REL Consultancy Group.
The survey examined 1,000 largest U.S. companies and showed the average company improved its days working capital (DWC) by a meger 2.1%. Compared with previous years - 2001 improvement was 9%. It is also just a fraction of the 7.6% improvement recorded by European companies.
Clearly, cash was a concern in 2002, as U.S. companies reacted to economic woes by slashing capital expenditures by nearly 13%. With the economy sputtering and factory utilization rates running at a low 75%, such cutbacks are justified in the short term. Working capital improvements can be maintained even after the economy improves.
Source: CFO
Published:2003-09-03
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