Dun & Bradstreet Composite CFO Optimism Index Q1-2020

Dun & Bradstreet Composite CFO Optimism Index declined by 29.3% (q-o-q) to 87.3 during Q2 2020

Optimism for operating margin and liquidity lowest since the index was instituted in Q2 2012

Mumbai, June 26, 2020: A recent survey of Chief Financial Officers (CFOs) conducted by business decisioning data and analytics firm Dun & Bradstreet, found that the confidence in financial and macro-economic conditions has declined and is lowest in over six years. The pan-India survey compared confidence levels from Q2 (Apr-Jun of the calendar year 2020) with the same quarter of the previous year. Based on the responses, the Dun & Bradstreet Composite CFO Optimism Index showed a decline of 29.3%, on a quarter-on-quarter (q-oq) basis, to 87.3 during Q2 2020. The Index, encapsulates the optimism level of CFOs surveyed on 12 parameters such as operating margin, liquidity position, level of financial risk on company’s balance sheet, risk appetite, need for raising short term and long term funds, cost of raising funds, availability of funds, domestic and global macroeconomic scenario, overall scenario for mergers and acquisitions, level of financial risks for corporate sector as a whole.

The survey revealed the following insights on CFOs’ perspective about the overall business climate in India:

• Optimism levels for financial performance of the company declined by 26.3% (q-o-q)
• Optimism level for macroeconomic scenario declined by 34.0% (q-o-q)
• Optimism level declined by 28.7% (q-o-q) in the industrial sector and by 27.3% (q-oq) in the services sector. The decline in optimism was steeper for macroeconomic scenario than for financial performance in both the sectors
• Only 27% of CFOs expect an increase in the operating margin of their companies in Q2 2020 – lowest level since the index was instituted in Q2 2012
• Similarly, only 22% of CFOs expect an increase in the liquidity position of their companies in Q2 2020 – lowest level since the index was instituted in Q2 2012
• The percentage of CFOs in the services sector indicating the need for raising shortterm funds (49%) and long-term funds (47%) is the highest since the index was instituted in Q2 2012
• Only 31% of CFOs expect the domestic macro-economic scenario to be favourable during Q2 2020 – lowest in almost eight years
• Over half (51%) of CFOs have stated cash flow management to be their priority in the next six months – highest in five quarters