Working Capital Report 2026
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The average working capital cycle lengthened in FY26, locking up an additional $5.5 billion of cash across the sampled companies. Rising DSO was partly offset by higher DPO, highlighting ongoing pressure on cash conversion.
Australian companies experienced a 1.9 day deterioration in working capital performance in 2026, tying up an additional $5.5 billion in day-to-day operations and reducing the cash available for investment, debt reduction and growth.
McGrathNicol’s 14th Working Capital Report analyses 239 ASX-listed companies across 13 sectors with a combined market capitalisation of $2.05 trillion. The report features detailed analysis and international comparisons for four of Australia’s most working capital-intensive sectors: Agriculture, Food & Beverages; Construction & Engineering; Health & Aged Care; and Retail.
Against a backdrop of inflationary pressures, elevated interest rates and geopolitical and trade uncertainty, the deterioration was driven principally by businesses taking longer to collect from customers.
Key findings
Working capital performance deteriorated in 9 of the 13 sectors analysed.
Lengthening customer collection periods were a key driver of the deterioration, with Days Sales Outstanding increasing by 1.7 days to 47.7 days.
Days Payables Outstanding increased by 1.8 days to 63.1 days as businesses took longer to pay suppliers, only partially offsetting slower customer collections and transferring pressure along the supply chain.
The surveyed companies managed to hold inventories at levels consistent with 2025.
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