Fortrea Holdings Inc. (FTRE)

Short-term

Turnover ratios

Fortrea Holdings Inc.'s activity ratios provide insights into the efficiency with which the company manages its resources.

1. Inventory turnover: The inventory turnover ratio indicates how many times the company sells and replaces its inventory during a period. Fortrea's inventory turnover was 40.14 on March 31, 2024, indicating that the company efficiently sells its inventory multiple times in the given period.

2. Receivables turnover: This ratio measures how quickly the company collects payments from its customers. Fortrea's receivables turnover varied throughout the year, with the highest turnover of 49.67 on June 30, 2024, and the lowest turnover of 17.44 on December 31, 2024. Higher turnover ratios generally imply effective management of accounts receivable.

3. Payables turnover: The payables turnover ratio assesses how quickly the company pays its suppliers. Fortrea showed a relatively stable payables turnover during the year, ranging from 20.52 to 22.90. A higher ratio implies that the company is efficiently managing its payable obligations.

4. Working capital turnover: This ratio evaluates how well the company utilizes its working capital to generate sales. Fortrea had a working capital turnover of 7.61 on March 31, 2024, which improved to 19.87 on June 30, 2024, and 19.07 on September 30, 2024. This indicates that the company is utilizing its working capital more effectively as the year progressed.

Overall, an analysis of Fortrea Holdings Inc.'s activity ratios suggests that the company efficiently manages its inventory, receivables, payables, and working capital to drive sales and optimize its operational performance.

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Average number of days

Based on the activity ratios provided for Fortrea Holdings Inc., we can analyze the efficiency of the company in managing its inventory, collecting receivables, and paying its payables.

1. Days of Inventory on Hand (DOH):
- As of March 31, 2024, Fortrea Holdings Inc. had inventory that turned over approximately every 9.09 days. However, data for subsequent quarters is missing (indicated as "— days"), making it difficult to assess any trend in inventory turnover efficiency throughout the year.

2. Days of Sales Outstanding (DSO):
- In terms of collecting receivables, the company took about 44.46 days to convert credit sales into cash as of March 31, 2024. The DSO improved significantly by June 30, 2024, reducing to 7.35 days, indicating a rapid conversion of accounts receivable into cash. The DSO increased slightly in the following quarters, indicating a moderate slowdown in receivables collection efficiency.

3. Number of Days of Payables:
- Fortrea Holdings Inc. took approximately 15.94 days to pay its suppliers as of March 31, 2024. The average number of days of payables remained relatively stable over the next three quarters, ranging between 17.38 to 17.79 days, indicating a consistent payment cycle.

In summary, Fortrea Holdings Inc. exhibited varying levels of efficiency in managing its inventory turnover, receivables collection, and payables payment throughout the year. Further analysis and comparison with industry benchmarks would provide more insights into the company's operational performance and liquidity management.

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Long-term

Fortrea Holdings Inc.'s fixed asset turnover ratio indicates how efficiently the company is utilizing its fixed assets to generate revenue. However, with a value of '—' across all quarters in 2024, it suggests that the company did not report any fixed asset turnover data during this period, making it difficult to assess the efficiency of its fixed asset utilization.

On the other hand, the total asset turnover ratio, which measures how well the company is using all its assets to generate sales, shows a range of 0.69 to 0.74 throughout 2024. A total asset turnover ratio below 1 can indicate that the company is not effectively using its assets to generate revenue, as seen in this case.

Overall, the lack of information on fixed asset turnover and the consistently low total asset turnover ratios in 2024 for Fortrea Holdings Inc. may suggest potential inefficiencies in asset utilization and revenue generation strategies. Further analysis and comparison with industry benchmarks would be necessary to gain a deeper understanding of the company's long-term activity performance.