Global Crisis Monitor Week-8 (May 6-13): Summary of The Survey On the Impact of COVID19 on Corporate Treasury


What you’ll learn


  • The outlook against accounts receivable experienced a positive shift this week with 29% (vs 17% from last week) of the total respondents having a positive outlook against this metric
  • Financial normalcy can be expected to be seen in 8 months from now, which is a positive shift from last week’s expectation of 10 months
  • A significant number of respondents cited having a negative outlook on access to lines of credit, indicating a shortage of short-term loans in the forthcoming weeks


About the Survey:

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).

Impact of COVID19 on Treasury: What Has Changed in Week-8 (May 6-13)

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

Access to Debt & Liquidity: The Perspective in Week-8 (May 6-13)

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

The Lasting Effect of COVID19: When Treasury Can Expect a Change

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

  • The expected point where the impact of the virus begins to diminish can be seen in the next 2-3 months, which is a negative shift from the earlier expectation of 20-25 days from last week.
  • The end of the COVID19 pandemic was expected to be seen within 10 months as cited by a majority of the respondents last week. The outlook against this metric has shifted positively, pushing the expectation to 7-9 months indicating a slower than expected recovery from the pandemic
  • Financial normalcy was expected to be seen in 10 months last week. This week, however, the outlook shifted to 8 weeks indicating a slower than usual recovery of current economic pressures and financial conditions.

Conclusion: Accounts Receivables and Commercial Paper Issuance remains the Top Concern for Treasurers in Week-7 (April 29 – May 5)

  • Accounts receivables remained a top concern for treasury departments this week since it only had a small cohort (29%) of the respondents with a positive outlook against the metric. The outlook against this metric has shown a positive shift in comparison to last week indicating a recovery.
  • Commercial Paper issuance also made its way into being a top concern for treasurers this week, since this metric had a negative outlook this week after having a positively steady streak from the earlier weeks. The negative outlook against this metric also indicates that organizations are currently focussed on managing working capital instead of lending short term debts.

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

Be part of next week’s survey

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.

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