Capital Efficiency in a Volatile Market: Stop Burning Capital
In a recent poll of 2,000 financial executives who attended a Deloitte Dbriefs webcast, a majority identified capital deployment as the biggest challenge they face in their capital planning processes. Moreover, they considered it a significantly greater challenge than raising capital or distributing it to stakeholders. For this survey, deploying capital was defined as maximizing returns associated with capital expenditures and mergers and acquisitions; maximizing working capital; effective balance sheet and cash-flow planning; and optimizing capital mobility, including international repatriations.
It is hardly surprising that financial executives are challenged with capital deployment today given the financial, political, and regulatory uncertainties buffeting markets worldwide. Some global companies add to this uncertainty by spreading capital evenly across geographies under a “what works in North America works elsewhere” approach. Besides coping with the upheavals of external market conditions, they may also struggle with internal issues, such as cultures with entrenched habits, which might be even more difficult to address.
So how can financial executives overcome these challenges in their capital planning and deployment processes?
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