In 2025, U.S. tariff levels reached their highest point since the 1930s, and many public companies still achieved healthy revenue growth, while a large number of businesses closed or filed for bankruptcy. The latest working capital survey shared by Hackett Group and CFO.com shows that the total revenue of the 1,000 largest non-financial public companies in the U.S. grew by 6% in 2025. The company noted in the report that these companies had experienced "moderate growth" in the previous two years.

But it is worth noting that last year's growth was not evenly distributed.

"In 2025, working capital performance varied across industries. Service and media industries significantly improved their cash conversion cycles through proactive accounts payable optimization, while product-intensive industries saw their cash conversion cycles deteriorate due to inventory buildup and changing supply chain pressures," the report said.

Key Data

  • -0.2 days: Change in cash conversion cycle in 2025, down from 38.6 days in the previous year to 38.4 days.
  • +2.1 days: Change in days sales outstanding.
  • +0.6 days: Change in days inventory outstanding.
  • +2.9 days: Change in days payable outstanding.

Hackett's report also shows that the total working capital opportunity of the observed companies reached a record $1.94 trillion in 2025, up from $1.73 trillion in 2024. The report states that this figure highlights "there is still a large amount of cash trapped in accounts receivable, inventory, and inefficiencies in daily processes."

At the same time, the time it took companies to convert investments into cash shortened to 38.4 days, an improvement of 1% year over year. Researchers attribute this to an increase in companies' days payable outstanding, which grew by 5% in 2025 to 2.9 days.

Tariffs played a role in last year's cash conversion cycle. The average time companies held goods extended to 56 days, an increase of 1.1%. Hackett researchers attribute this to companies stockpiling inventory to mitigate supply chain bottlenecks and the Trump administration's aggressive tariff policies.

Gerhard Urbasch, deputy chief analyst at Hackett, said in an interview with CFO.com that these findings indicate a paradigm shift is occurring in global business, with many companies moving from "just-in-time" to "just-in-case."

Bubble or Boost?

Urbasch said 2025 also saw another shift: a move toward an "AI-driven economy." This made some companies, such as semiconductor manufacturers, temporary revenue engines. Hackett's research shows that revenue for semiconductor and related equipment companies grew by 32% last year, computer hardware and peripherals grew by 21%, and internet software and services achieved a 16% year-over-year increase.

However, as last week's crash in South Korean tech stocks showed, whether these profits can be sustained in the long term remains an open question. Multiple critics have long pointed out the circular nature of many AI-related deals.

The AI gold rush will clearly not benefit all companies. As Goldman Sachs CEO David Solomon said last year: "There will be winners and losers, and it's hard to pick the winners and losers right now."

Urbasch acknowledged that the market has shown "irrational exuberance" toward AI, but he insists the technology still holds promise for the business world. He cited an example where an agentic product automated the invoice-to-payment process for his client.

"We think these are very rational, very reasonable investments," he said of such use cases. "There is a payoff in improving DPO."

Damon Rottermond, director of business transformation at Hackett, added that companies have now moved beyond an "AI for AI's sake" mindset. In his view, some companies now view such technologies as "levers that can be pulled to achieve a goal."

Perspectives Outside the Tech Industry

Despite the market's frenzy over artificial intelligence, several other industries still achieved revenue growth last year. These include the pulp, paper, and forest products industry, where revenue in this category grew by an average of 15%. Urbasch attributes this to continued demand for packaging from e-commerce. The aerospace and defense industry also saw revenue grow by 13%.

The airline industry was another bright spot worth noting, with its cash conversion cycle improving by -5 days. Hackett researchers said the industry "showed sustained focus on cash conversion."

Industries that saw revenue declines last year include homebuilding (down 4%) and telecommunications (also down 4%).