Australian working capital trends

Release cash through working capital performance

During economic uncertainty, a disciplined focus on working capital can release cash, reduce debt and create self funding capacity to support strategic decisions.

Our publication, Australian Working Capital Trends, covers how 500+ Australian organisations are managing liquidity in an increasingly uncertain economic environment.

Inflationary pressures, higher interest rates and softer growth conditions continue to challenge cash flow resilience, highlighting working capital as a crucial tool for liquidity, operational efficiency and informed decision‑making.

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Australian working capital trends

March 2026

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Key working capital trends

Analysis of 500+ Australian public companies shows that the national Cash Conversion Cycle deteriorated materially between FY21 and FY24, before improving in FY25.

While receivables has remained broadly stable over the five‑year period, many businesses were carrying structurally higher inventory levels and, to a lesser extent, extending payment times to suppliers.

Cash Conversion Cycle (CCC)

Increased from 58 days in FY21 to 5-year peak of 71 days in FY24, before improving to 62 days in FY25. This reflects gradual normalisation but continued pressure on liquidity.
Days Inventory Outstanding (DIO)

Rising inventory levels since FY21, DIO peaked at 76 days in FY24 and easing to 68 days in FY25, aligned with a stabilised supply chain.
Days Sales Outstanding (DSO)

Remains stable at approximately 46 days underling the increased importance of maintaining cash within your organisation.
Days Payable Outstanding (DPO)

Approximately 52 days in FY25, the strongest performance across the period analysed, despite regulatory focus with the introduction of Payment Times Reporting Act 2020.

How KPMG can help

With economic conditions expected to remain challenging in 2026, a sustained and disciplined focus on working capital performance provides a practical opportunity to release cash, reduce debt and create self-funding capacity to support strategic priorities.

To explore how KPMG can help you on your cash and working capital improvement journey, contact our Working Capital Advisory team today for a no-obligation and confidential discussion.