J.P.Morgan – Working Capital Index, 2024

In 2023, S&P 1500 companies reported record high working capital levels, with $707 billion of trapped liquidity due to excess inventory and longer receivable days. Cash levels decreased slightly as capital expenditure activities increased. The cash conversion cycle increased by 2.4 days, with longer DSO and DIO. The Working Capital Index rose by 7.2 points, with top movers in CCC including the semiconductor and pharmaceutical industries. Supply chain disruptions, high capital costs, sustainability, and AI investments are expected to be key concerns for companies in 2024. Uncertainty may arise due to factors such as reshoring of supply chains, global elections, COVID debt refinancing costs, and increased AI investments. Corporate priorities in 2024 are likely to focus on managing supply chain challenges and macroeconomic factors.