WORCESTERSHIRE companies could help in the release up to £12.5bn from working capital to boost companies' performance, according to professional services network PwC in its annual working capital study.

PwC’s cash for growth analysis combed the accounts of 7,368 companies across the world to calculate the amount of money which could be released through increased efficiency.

Karen Dukes, partner and cash generation expert at PwC in the Midlands, said: "Our study shows that working capital performance for the Midlands, as measured by working capital days, improved by two days to 32 days in 2013. The region’s industrial products and retail and wholesale sectors drive the high cash requirement in the region, while the biggest improvement is seen in the automotive sector, with a year on year improvement of 12.1 working capital days.

“Companies in our region have shown better than average growth of three per cent over the last year. There’s usually a fight to maintain this, which often results in increased working capital. The Midlands has shown a year-on-year improvement in working capital, demonstrating that many companies are putting closer scrutiny on working capital performance, as this is amongst the cheapest sources of capital.

“Some sectors seem to be feeling the pinch; the technology media and telecoms , retail and wholesale and consumer goods sectors all significantly underperformed compared with the UK trend, with consumer goods having almost three times the cash requirement, and TMT requiring almost 50 per cent more. There is more that can be done across all sectors in the region to improve working capital and release this trapped cash.

"This can be achieved through working capital improvements across all three cycles: receivables, payables and inventory, with the latter playing a key role especially for manufacturing, retail and wholesale companies. The analysis shows that Midlands companies could, on average, release between five and seven per cent revenue as cash from working capital.”