{"id":1016947,"date":"2026-11-05T01:54:07","date_gmt":"2026-11-05T06:54:07","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/the-hackett-group-study-finds-e1-26-trillion-remains-trapped-in-working-capital-across-europes-largest-companies\/"},"modified":"2026-11-05T01:54:07","modified_gmt":"2026-11-05T06:54:07","slug":"the-hackett-group-study-finds-e1-26-trillion-remains-trapped-in-working-capital-across-europes-largest-companies","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/the-hackett-group-study-finds-e1-26-trillion-remains-trapped-in-working-capital-across-europes-largest-companies\/","title":{"rendered":"The Hackett Group\u00ae Study Finds \u20ac1.26 Trillion Remains Trapped in Working Capital Across Europe\u2019s Largest Companies"},"content":{"rendered":"

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The Hackett Group\u00ae<\/sup> Study Finds \u20ac1.26 Trillion Remains Trapped in Working Capital Across Europe\u2019s Largest Companies<\/b><\/p>\n

Cash conversion cycles improved 1.8 days despite weakening profitability, underscoring the need for process-led transformation to sustain gains<\/i><\/p>\n

MIAMI–(BUSINESS WIRE<\/a>)–The Hackett Group, Inc.<\/a> (NASDAQ: HCKT), an enterprise AI transformation<\/a> firm, today announced findings from its 2026 European Working Capital Survey, revealing that despite improving working capital performance<\/a>, Europe\u2019s largest companies continue to hold an estimated \u20ac1.26 trillion in excess working capital equivalent to 14% of annual revenue.<\/p>\n

This press release features multimedia. View the full release here: https:\/\/www.businesswire.com\/news\/home\/20261104644794\/en\/<\/a><\/p>\n

\"By<\/p>\n

By working capital measures, the 1,000 largest European public companies had a good year. The Hackett Group\u2019s 2026 European Working Capital Survey found the average cash conversion cycle (CCC) improved by 1.8 days (4%) to 44.8 days. Days sales outstanding (DSO) fell by 1.9 days (4%) to 47.4 days, while days inventory outstanding (DIO) declined by 3.3 days (5%) to 67.3 days. Days payable outstanding (DPO) moved in the other direction, falling 3.3 days (5%) to 69.8 days to return part of the gain. The broader picture was weaker. Revenue for Europe\u2019s top 1,000 firms rose just 0.8% compared to 6% in North America. Operating cash flow fell 3% to 13% of revenue and earnings before interest, taxes, depreciation and amortization (EBITDA) dropped 2% to 17%. The average cash-to-current liability ratio slipped 1% to 29%. Debt as a share of revenue improved 1% to 47%, though leverage remains 13% higher than three years ago.<\/p>\n<\/div>\n

\nThe study, which analyzed the 1,000 largest nonfinancial publicly traded companies headquartered in Europe, found that the average cash conversion cycle (CCC) improved by 1.8 days (4%) in 2025. Companies reduced both days sales outstanding (DSO) and days inventory outstanding (DIO), releasing cash from receivables and inventory despite a challenging economic environment.<\/p>\n

\nThe improvements came despite weakening financial performance. Revenue grew just 0.8% in 2025, while operating cash flow<\/a> declined 3%, EBITDA (earnings before interest, taxes, depreciation and amortization) fell 2%, and net income margin decreased 8%. With traditional sources of cash generation under pressure, working capital management<\/a> is becoming increasingly important. The research points to the need for coordinated, end-to-end process redesign, with artificial intelligence (AI) helping accelerate further gains and sustain results.<\/p>\n

\n\u201cOne of this year\u2019s most significant findings is the divergence between working capital performance and broader financial performance,\u201d said Anne Morgan-Smith, director at The Hackett Group\u00ae<\/sup> and author of the research. \u201cWith revenue growth slowing and profitability under pressure, working capital efficiency is becoming an increasingly important source of self-funded liquidity. By releasing cash tied up in receivables and inventory, companies can help fund operations, reduce borrowing needs and preserve capacity for strategic investment.\u201d<\/p>\n

\nDespite recent improvements, significant opportunities remain. While the total working capital opportunity<\/a> declined 8% (\u20ac113 billion) from the previous year, it remains substantial and is distributed across three areas:<\/p>\n