Fortrea Holdings Inc. (FTRE)

Cash conversion cycle

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024
Days of inventory on hand (DOH) days — — — 9.09
Days of sales outstanding (DSO) days 20.92 16.17 7.35 44.46
Number of days of payables days 17.64 17.38 17.79 15.94
Cash conversion cycle days 3.28 -1.21 -10.44 37.61

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 20.92 – 17.64
= 3.28

The cash conversion cycle of Fortrea Holdings Inc. has shown fluctuation over the four quarters of the year 2024.

- As of March 31, 2024, the company had a cash conversion cycle of 37.61 days, indicating that it took approximately 37.61 days for Fortrea Holdings Inc. to convert its investments in inventory and accounts receivable into cash during that period.

- The figure improved significantly by June 30, 2024, with a negative cash conversion cycle of -10.44 days. This suggests that the company was able to convert its investments into cash at a faster rate than it acquired inventory or extended credit to customers during this quarter.

- By September 30, 2024, the cash conversion cycle remained negative at -1.21 days, indicating continued efficiency in managing working capital and converting it into cash efficiently within approximately -1.21 days.

- In the last quarter of the year, December 31, 2024, the cash conversion cycle increased to 3.28 days, reflecting a slightly longer period to convert investments in inventory and receivables into cash compared to the previous quarter.

Overall, the fluctuations in the cash conversion cycle of Fortrea Holdings Inc. over the year 2024 suggest variations in the company's efficiency in managing its working capital and converting it into cash. The negative figures in the middle of the year indicate efficient working capital management, while the positive figure at the end of the year indicates some slowdown in cash conversion efficiency.