There were some CFOs in Corporate Europe who never flinched this summer as the subprime-mortgage fiasco unfolded. They were the fortunate ones whose firms have focused over recent years on cash flow while managing to avoid the reckless leverage that has landed many others in hot water.
It’s these cash-conscious companies that are the stars of “Go with the Flow,” which introduces CFO Europe’s first comprehensive Cash Masters Scorecard. Produced in collaboration with consultants REL, we show which of Europe’s biggest companies excel in generating and managing cash. We also reveal that many CFOs are doing well preparing their companies for the proverbial rainy day by keeping working capital and SG&A low as a percentage of revenue, and turning a high share of profit into free cash flow.
And any of these top-ranking companies with healthy balance sheets couldn’t be better prepared for dealmaking today now that the long stretch of cheap credit is coming to an end. That’s the central focus of “Only the Strong Shall Thrive,” a feature launching our autumn banking and finance special section. It chronicles the events leading up to the credit turmoil that are bringing many deals to a screeching halt, and highlights how some cash-rich companies are using the current mayhem to their advantage.
But some sectors have it easier than others, as another feature, “Hard Cell,” shows. With or without a credit crunch, Europe’s young biotech firms are struggling to woo investors as their American rivals have done. While the CFOs we catch up with offer various reasons why this is the case, mastering cash management is a familiar theme among them all.