- The global cash conversion cycle (CCC) rose again in 2025 — and it is stuck at a high plateau. The global CCC – how long it takes for a unit of cash spent on operations to be converted into cash collected from sales – lengthened by a moderate half a day to above 67 days of turnover, some +3 days above its 10-year average and close to its 2023 high of 68. The past four years now run about +4 days longer than before 2020 (63): not a spike, but a structurally higher plateau that shows no sign of easing.
- Asia stands out with the longest cash conversion cycle. The cash conversion cycle lengthened in Western Europe (+1.8 day), the Middle East & Africa (+1.6 days), Asia (+1.2 days) and South America (+1 days), but shortened in North America (-2.2 days) and Eastern Europe (-1.7 days). Asia carries the longest cycle at 70 days, driven by a persistent commercial gap: long customer terms (59 days of Days Sales Outstanding) that a low Days Payable Outstanding (44 days) cannot fully offset. It is followed by a tightly-clustered Western Europe, North America and South America (all 63 days), while Eastern Europe and the Middle East & Africa run the leanest.
- The real driver is inventories in a world shaped by geoeconomics. Days Inventory Outstanding (DIO) now explains almost 80% of the CCC level and more than 80% of its change over 2014-2025 – up from 68% of the variation before 2021 to 90% since. This reflects a fundamental change in corporate behavior: Companies are moving away from "just-in-time" efficiency toward "just-in-case" resilience, with larger inventories now a strategic hedge against geopolitical uncertainty, supply-chain disruptions and trade fragmentation. In other words, supply chains are no longer optimized only for cost; they are increasingly designed for security, resilience and optionality.
- Sector global dispersion is extreme: 25% of firms sit below 43 days and 25% above 107, suggesting an emerging bifurcation between strategic sectors and the rest of the economy. Twelve of 20 sectors extended their cash conversion cycle – automotive suppliers (+4 days) and paper, metals and textiles (+3 days each) leading – while eight compressed, notably transport equipment (-6 days), computers & telecom (-4 days) and energy (-3 days). The sectoral divergence in working-capital dynamics reflects the uneven impact of securonomics. Industries most exposed to supply-chain fragmentation – particularly upstream manufacturing and industrial inputs – have increased inventory buffers, resulting in structurally higher working-capital requirements. By contrast, several strategically important sectors, including energy, transport equipment and digital infrastructure, have shortened their cash conversion cycles despite heightened geopolitical uncertainty. This likely reflects a combination of stronger pricing power, robust cash generation, supportive industrial policies and sustained structural demand. Strategic relevance, therefore, does not necessarily translate into higher inventory intensity; it increasingly provides the financial flexibility and operational leverage needed to strengthen resilience while preserving working-capital efficiency.
- For 2026 we expect a contained rise in CCC. First, the US-Iran conflict is expected to follow a “lighter” version of the 2022 supply-chain shock template: faint in listed firms' financials in H1 2026, as flows take time to normalize, and more tangible in H2 as the disruption feeds through supply chains with a lag. As a result, we do not expect a full replication of the 2022 surge (+5 days of CCC, of which 81% came from inventories). The shock will not land evenly across sectors. Electronics, pharmaceuticals, textiles, automotive suppliers, metals and paper face the most direct pressure: already inventory-heavy and running elevated cycles, they have the least room to absorb a further DIO rise without tipping their financing needs into distress territory. Construction and machinery & equipment carry the largest absolute cycles (~103 days) and are unlikely to escape a broad inventory rebuild. Second, the shock should be partly offset by continued private-sector spending on AI infrastructure and data centers, which supports computers & telecoms and software & IT, keeping a meaningful share of the economy on a compressing or at worst flat trajectory. On these assumptions, measures to reassess energy security, strategic inventories and supply-chain resilience, together with the direct fallout of the conflict, should push global DIO up by around +2 days. Given our estimated elasticity, each additional day of DIO translates into +1.16 days of CCC globally.