What Are Global Businesses’ Top Challenges Today?

In early 2020, as Covid-19 disrupted business operations in every corner of the globe, liquidity became one of executives’ top concerns. Today, as companies around the world continue to recover from the pandemic’s fallout—supply-chain challenges, inflation, and rising interest rates, to name a few ongoing issues—liquidity is again at the forefront of senior managers’ minds.

C2FO recently surveyed 1,240 business and finance managers across 10 countries about the current status of their organizations’ working capital and liquidity, as well as their concerns for the near future. The results reflect a fairly gloomy perspective on the present state of commerce but substantially more optimism about the road ahead.

Overall, 28 percent of global respondents said their country’s economy is either excellent or good. However, 39 percent described their domestic economy as either not very good or not good at all.

The United States and U.K. are among the most pessimistic nations, with only 15 percent and 13 percent, respectively, expressing a positive outlook. By contrast, respondents in Asia are much more optimistic: Fifty-seven percent of those from India think their economy is in good shape, as do 56 percent of respondents from China.

Despite the negative current-day sentiments, respondents’ predictions for the near future are substantially more positive, across the board. Thirty-two percent of all respondents think their domestic economy will improve slightly over the next year, and 12 percent expect the economy to get much better over that time frame. On a more granular level, 68 percent expect their company’s revenues to grow in the next year, while only 8 percent expect revenues to shrink.

That optimism doesn’t erase the fact that survey respondents are quite worried about the prospective effects that ongoing macroeconomic challenges might have on their business. Sixty-three percent of all respondents expect inflation to have a negative impact on their organization in the next year, and 46 percent are concerned about how rising interest rates will affect their ability to obtain financing.

In the immediate term, 21 percent of respondents said they don’t currently have access to the liquidity they need to run their business. Forty-five percent cited higher interest rates as a significant obstacle to securing capital, whereas 30 percent blamed poor cash flows for their liquidity struggles.

The problem is largest for the smallest companies: Twenty-seven percent of organizations with fewer than 50 employees are concerned about having adequate liquidity over the next year, vs. 20 percent of companies with more than 1,000 employees.

This result emphasizes the timeliness of next week’s Alexander Hamilton Award webcast from Treasury & Risk, when we will recognize the winners of our 2022 awards in Small Company Excellence. The Goshawk Aviation treasury team and the CFO of Lithko Contracting will explain how their organizations overcame Covid challenges by streamlining liquidity management processes and improving visibility into working capital.

The live event will take place next Wednesday, July 20, at 11 a.m. ET. Register today!