Dun & Bradstreet Composite CFO Optimism Index

Dun & Bradstreet Composite CFO Optimism Index

 55% of CFOs expect liquidity position of the company to increase in Q4 2017, highest in 4 quarters

Only 26% of CFOs indicated need for raising short term funds in Q4 2017 – lowest since Q2 2012

Mumbai, Dec 5, 2017: Dun & Bradstreet, the world’s leading provider of global business information, knowledge and insight conducted a pan India survey of Chief Financial Officers (CFOs) in which they were asked about their confidence in the overall financial and macro-economic conditions for Q4 2017 (Oct-Dec of the calendar year 2017), as compared to the same quarter of the previous year. The survey reveals how optimistic the CFOs are with respect to the overall financial health of their respective companies, the business risk environment and the macroeconomic scenario in the country. 

The survey revealed interesting facts about CFOs’ perspective on the overall business climate in the country:

• The Composite CFO Optimism Index for Q4 2017 increased by 3.1% on a q-o-q basis. However, it declined by around 10.5% on a y-o-y basis
•  During Q4 2017, the optimism level of the services sector increased by 4.1% (q-o-q), a 5-quarter high, while the optimism level of the industrial sector increased by 3.3% (q-o-q), a 6-quarter high
• 50% of CFOs in the services sector expect global macro-economic scenario for corporate sector to improve - highest since Q1 2015.
• 55% of CFOs are optimistic about the liquidity position of the company – highest since Q1 2017
• 52% of CFOs in the industrial sector expressed optimism about overall scenario for mergers & acquisitions in Q4 2017 – highest in 3 years
• 30% of CFOs in the industrial sector expect risk appetite to increase in Q4 2017 - highest in 13 quarters 
• Dividend declaration (11%) continued to be the least priority for 3 consecutive quarters
• Effective recovery system has been the most preferred risk management tool while tightening credit appraisal mechanisms has been the least preferred risk management tool by CFOs for two consecutive quarters
• Percentage of CFOs in the industrial sector indicating effective portfolio management to be their risk management tool in the next six months is the lowest since Q3 2014

Commenting on the findings of the survey, Manish Sinha, Managing Director – India, Dun & Bradstreet said “Optimism levels for Q4 2017 amongst CFOs have improved over the previous quarter. The proactive measures taken by the government, especially bank recapitalisation and amendments to GST has helped optimism levels. In addition, there have been modest improvements in international economic activity. This improved optimism level should translate to an uptick in capex and other investments, which remains muted compared with last year. What will really help now is a strong rebound in consumer demand”.