Fortrea Holdings Inc. (FTRE)

Days of sales outstanding (DSO)

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024
Receivables turnover 17.44 22.57 49.67 8.21
DSO days 20.92 16.17 7.35 44.46

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 17.44
= 20.92

Based on the data provided for Fortrea Holdings Inc., the days of sales outstanding (DSO) have shown fluctuations throughout the year 2024.

On March 31, 2024, the DSO was 44.46 days, indicating that on average, it took the company approximately 44 days to collect its accounts receivable. This could suggest a slower collection process, potentially impacting cash flow and liquidity.

By June 30, 2024, the DSO decreased significantly to 7.35 days, reflecting a substantial improvement in the company's accounts receivable collection efficiency. A lower DSO implies that customers were paying their invoices quicker, potentially enhancing the company's working capital management.

However, by September 30, 2024, the DSO increased to 16.17 days, signifying a slight delay in accounts receivable collection compared to the previous quarter. This could indicate a temporary slowdown in customer payments or changes in credit policies.

Ending the year on December 31, 2024, the DSO rose further to 20.92 days, indicating a prolonged collection period compared to the previous quarter. This increase may raise concerns about potential liquidity issues or difficulties in managing accounts receivable effectively.

Overall, the fluctuation in Fortrea Holdings Inc.'s DSO throughout 2024 suggests varying levels of efficiency in collecting accounts receivable, which could impact the company's cash flows and working capital management. Analysing trends in DSO over time can provide valuable insights into the company's credit policies, customer payment behavior, and overall financial health.