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 eighth week (May 6-13), the survey witnessed a 43% increase in the number of respondents bringing the total to 1000 versus the earlier count of 700 from last week (April 29 – May 5).
Of the 1000 respondents who participated in the survey, 35%cited having a positive outlook about organizational liquidity, 17% cited having a negative outlook and 48% 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 Accounts receivables, since 29% of the total respondents had a positive outlook against this metric
This week’s outlook on most of the survey metrics, such as access to short-term loans, money market funds and commercial paper issuances, showcased a negative shift, in comparison to last week (April 28- May 5); implying alarming business conditions in the coming weeks fueled by the pandemic
The outlook on the US government’s fiscal activities also saw a negative shift in the outlook, in comparison to last week, indicating a negative outlook on the remediation steps being taken by the US government.
The outlook on accounts receivable, however, showcased a slightly positive shift with 29% (vs 17% from last week) of the total respondents having a positive outlook against it, while implying a slightly better recovery of the metric in the coming weeks and 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 changed from -5X (April 28 – May 5) to -3.5X, indicating a positive shift and hinting at a recovery of this metric.
2. Bank lines of credit which earlier had an extremely positive outlook of +4.0X last week, shifted to +0.4X this week, showing a negative shift and indicating lesser accessibility to 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, but, the metric has shifted from +5.0X (outlook last week) to +2.2X, indicating a retrogressive shift of this metric in the coming weeks
4. The outlook on commercial paper issuance this week saw a negative shift from +2.0X (which was the outlook last week) to -1.5X, indicating hindrances in issuing commercial papers to secure short-term debts
5. Covenant requirements & MACs had an almost neutral outlook last week among the respondents since it stood at 0.7X vs 0X (in comparison to week 7 – April 28 – May 5). This week, however, the outlook shifted to +1.0X, 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 negative side by standing at -2.0X in comparison to 0X from last week, indicating a negative 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 months.
However, this week’s results pointed out that financial normalcy can be expected to be seen within 8 months from now; hinting at a quicker than expected recovery from 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-7 April 28 – May 5
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