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Historically, LATAM firms maintain higher cash buffers than their S&P counterparts. Firms observed a spike in cash levels in 2020, as companies raised debt and increased cash buffers to strengthen balance sheets in the face of the COVID-19 pandemic. In 2022 the cash levels further normalized, but still have not reached pre-pandemic levels.
2022 saw working capital levels begin to normalize. Working capital increased from 17% to 17.7% in LATAM; this is lower than pre-pandemic levels in the region, but a sharper rise than the S&P 1500, which increased from 13.2% to 13.3%.
Inventory levels increased thanks to inflation in Latin American countries and a corresponding decrease in demand. Economic activity in the region is still stabilizing.
Includes foods, beverage, agricultural services and products
Includes metals & mining mainly and paper & packaging companies
Includes a host of broadline, home improvement other specialty retail stores
Others include apparels, chemicals, hospitality and entertainment, home building, construction, etc.
Please kindly note that this is a summarized version of the full report. For detailed findings, please reach out to the J.P. Morgan Payments Advisory team or the authors of the report.
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All values in this report are as of December year-end for both Nikkei 225 and S&P 1500 till 2020, after which Nikkei 225 financials are changed to March year-end, while for S&P 1500 it continues to be December year-end, a quarter before the Nikkei 225 March year-end.