The Hackett Group’s 2025 U.S. Working Capital Survey reveals a 4% improvement in the cash conversion cycle (CCC), now at 37 days, driven by a 3% increase in days payable outstanding (DPO). However, $1.7 trillion remains trapped in excess working capital, with days sales outstanding (DSO) and days inventory outstanding (DIO) showing slight declines due to macroeconomic volatility.
CCC Improvement: 4% reduction, now at 37 days, led by 3% DPO increase to 59 days.
Excess Working Capital: $1.7T untapped, 35% of gross working capital, 11% of revenue.
DSO Decline: Second year of degradation, with an 18-day gap between top and median performers, representing $600B opportunity.
Industry Highlights: Semiconductors (+6%), textiles (+10%), and utilities (+34%) improved CCC; computer hardware saw a 182% decline.
Gen AI Impact: Enhances inventory management, predictive collections, and supplier risk mitigation.
Financial Metrics: Revenue up 4%, EBITDA margin at 19% (+6%), operating cash flow at 16%.
The Hackett Group’s 2025 U.S. Working Capital Survey, analyzing the top 1,000 U.S. publicly traded nonfinancial companies, highlights a 4% improvement in CCC to 37 days, rebounding from a year of deterioration. The 3% DPO increase to 59 days drove this progress, but DSO and DIO worsened slightly due to cautious inventory strategies and shifting customer dynamics. “Amid high interest rates and growing tariff risks, the working capital opportunity is more strategic than ever,” said István Bodó, Senior Director of Transformation Finance at The Hackett Group.
Excess Working Capital: $1.7T remains trapped, with accounts receivable ($600B) as the largest opportunity due to an 18-day DSO gap.
Performance Gaps: Top-quartile companies outperform median performers by 9% in DPO, with DSO degradation reflecting extended customer payment terms.
Industry Performance:
Semiconductors: 6% CCC improvement, 18% DPO increase.
Textiles, Apparel, Footwear: 10% CCC gain, 22% DPO rise.
Utilities: 34% CCC improvement, 13% DPO increase.
Computer Hardware: 182% CCC decline due to AI-driven overproduction and trade uncertainties.
Financial Metrics: Aggregate revenue rose 4%, with semiconductors (+28%) and internet software (+14%) leading. EBITDA margin hit 19% (+6%), and operating cash flow reached 16%. Capital expenditures grew 5% for AI and supply chain resilience.
Generative AI (Gen AI) is identified as a transformative tool for working capital management, offering solutions like autonomous inventory management, predictive collections, and supplier risk mitigation. “Finance leaders ranked working capital optimization as their top priority for 2025,” said Vince Griffin, Principal at The Hackett Group. “Gen AI is emerging as a valuable tool for strengthening discipline around working capital – provided it is deployed properly and viewed as part of a broader strategy rather than a quick fix.”
The survey underscores the need for process changes, skill development, and technology modernization to unlock the $1.7T opportunity. Top performers leverage Gen AI to enhance forecasting and streamline processes, while median companies struggle with payables optimization. The widening performance gap emphasizes the urgency of adopting advanced technologies to improve liquidity and fund growth.
The Hackett Group, Inc. is an IP and platform-based, Gen AI strategic consulting and executive advisory firm that enables Digital World Class® performance. Using AI XPLR™ and ZBrain™ – our ideation through implementation platforms – our experienced professionals help organizations realize the power of Gen AI and achieve quantifiable, breakthrough results, allowing us to be key architects of their Gen AI journey.
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