The Global Crisis Monitor is an ongoing survey, conducted by HighRadius in partnership with Strategic Treasurer. The intention behind the survey is to understand the sentiments of the treasury community at large, and also the current challenges Treasury departments and their organizations are facing.
In its seventh week (April 28-May 5), the survey witnessed a ~7.5% increase in the number of respondents bringing the total to 700 versus the earlier count of 650 from last week.
Of the 700 respondents who participated in the survey, 27% cited having a positive outlook about organizational liquidity, 14% cited having a negative outlook and 59% remained neutral.
Thus, shifting the overall outlook on organizational liquidity towards a net positive this week, while implying diminishing challenges surrounding organizational liquidity in the forthcoming weeks.
While this was a positive insight, respondents from the survey showed lessening concerns surrounding:
1. Accounts receivables, since the outlook this week remained unchanged with 17% of the total respondents having a positive outlook against this metric
2. Access to short-term debts: More than 90% of the total respondents seemed less concerned about the organizational access to short-term debts, indicating an easier availability of short-term debts & lines of credit in the coming weeks.
This week’s outlook on most of the survey metrics, such as access to short-term loans, money market funds and commercial paper issuances, covenant requirements have remained positive, and have also shown a positive forward shift, in comparison to last week (April 22-28); implying better business conditions in the coming weeks, despite the pandemic
The outlook on the US government’s fiscal activities also saw a significant improvement in the outlook, in comparison to last week, indicating a positive outlook on the remediation steps being taken by the US government.
The outlook on accounts receivable remained stagnant this week at with only 17% of the total respondents having a positive outlook against it while implying a sluggish recovery of the metric in the coming weeks, but, with indications of a positive shift
Here is a representation of the outlook that treasury departments currently have on various liquidity instruments available to them.
1. Outlook on accounts receivable remained unchanged and stood at -5X, in comparison to last week (April 22-28), hinting at a sluggish recovery of this metric.
2. Bank lines of credit which earlier had a negative outlook of +3.5X last week, shifted to +4.0X this week, indicating better availability of short-term loans provided by banks, that can be leveraged by organizations
3. Money market funds, which were set up by the central banks to induce liquidity into the system had a positive outlook this week too and has shifted from +4.5X (outlook last week) to +5.0X, indicating a progressive shift of this metric in the coming weeks
4. The outlook on commercial paper issuance this week saw a slightly negative shift from +3.2X (which was the outlook last week) to +2.0X, indicating hindrances in issuing commercial papers to secure short-term debts
5. Covenant requirements & MACs had a neutral outlook last week among the respondents since it stood at 0X vs -1.6X (in comparison to week 6 – April 22 – 28). This week, however, the outlook shifted to +0.7X, hinting towards a progressive positive outlook against the metric in the coming weeks
6. The outlook for the US fiscal policy shifted slightly more towards the positive side by standing at 0X in comparison to -0.3X from last week, indicating a positive sentiment about the remediation initiatives being proposed by the US Senate
In last week’s survey, respondents cited that COVID19 was expected to reach its inflection point in less than 1 month, while financial normalcy was expected to be restored within 10-11 months.
However, this week’s results pointed out that financial normalcy can be expected to be seen within 10 months from now; hinting at slow recovery of current economic pressures and financial conditions.
A Projected Timeline of Health & Financial Inflection
We’ll continue to monitor and report on how the changing dynamics of COVID19 has been impacting Treasury and Finance professionals, and on the way, we will empower readers with valuable insights that can help mitigate risks.
Insights: Key survey findings of Week-6 – April 22-28
Webinar Recording: Recession Proofing Your Business: Cash Forecasting Amidst Volatility
With CFOs demanding accurate and current views of cash, how can Treasury departments ramp up the speed with which they forecast to deliver each iteration in real-time, especially when teams are working remotely?
For answers, join the 30-min webinar replay where Tracey Knight and Bill Weiss discuss how companies can quickly pivot to the new norms, using technology and generating accurate forecasts on a real-time basis.
Re-Inventing Cash Forecasting Using Artificial Intelligence
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