Fortrea Holdings Inc. (FTRE)
Profitability ratios
Return on sales
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | |
|---|---|---|---|---|
| Gross profit margin | -8.04% | -7.40% | -7.35% | -3.47% |
| Operating profit margin | -6.12% | -4.35% | -3.22% | -0.21% |
| Pretax margin | -12.55% | -11.55% | -10.28% | -4.02% |
| Net profit margin | -12.41% | -11.27% | -10.50% | -4.14% |
Fortrea Holdings Inc. has shown negative profitability margins throughout the fiscal year 2024. The gross profit margin ranged from -3.47% to -8.04%, indicating that the company's sales revenue did not cover the cost of goods sold, leading to a loss on its core operations.
Similarly, the operating profit margin fluctuated from -0.21% to -6.12%, suggesting that Fortrea Holdings struggled to generate profits after accounting for both variable and fixed operating expenses. The pretax margin, which reflects the company's profitability before taxes, ranged from -4.02% to -12.55%, indicating ongoing financial challenges.
The net profit margin, representing the company's bottom-line profitability after all expenses have been deducted, varied from -4.14% to -12.41%. This indicates that Fortrea Holdings experienced losses even after considering taxes and other non-operating expenses.
Overall, the consistently negative profitability margins suggest that Fortrea Holdings Inc. faced significant financial difficulties in fiscal year 2024, raising concerns about its ability to generate sustainable profits and meet its financial obligations.
Return on investment
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | |
|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -4.52% | -3.19% | -2.49% | -0.15% |
| Return on assets (ROA) | -9.18% | -8.28% | -8.12% | -2.83% |
| Return on total capital | -6.71% | -4.28% | -3.02% | 0.39% |
| Return on equity (ROE) | -24.11% | -20.04% | -19.81% | -7.55% |
Based on the provided data, Fortrea Holdings Inc.'s profitability ratios show a concerning trend over the four quarters of 2024.
1. Operating Return on Assets (Operating ROA):
- The Operating ROA indicates how efficiently the company is generating profits from its operational assets. Fortrea Holdings Inc. shows negative Operating ROA values ranging from -0.15% to -4.52% throughout 2024, suggesting that the company's core operations are not effectively generating profits.
2. Return on Assets (ROA):
- ROA measures the overall profitability of the company with respect to its total assets. Fortrea Holdings Inc. exhibits deteriorating ROA values from -2.83% in March 2024 to -9.18% in December 2024. These negative values indicate that the company is not effectively using its assets to generate profit.
3. Return on Total Capital:
- The Return on Total Capital ratio indicates the company's ability to generate returns for both equity and debt holders. Fortrea Holdings Inc. displays decreasing Return on Total Capital values from 0.39% in March 2024 to -6.71% in December 2024. This decline suggests that the company's ability to generate returns for all capital providers has worsened over the year.
4. Return on Equity (ROE):
- ROE measures the return generated on shareholders' equity investment. Fortrea Holdings Inc. shows a consistent decrease in ROE from -7.55% in March 2024 to -24.11% in December 2024. This decline indicates that shareholders' equity is not efficiently employed to generate profits for the company.
In conclusion, the declining profitability ratios for Fortrea Holdings Inc. over 2024 raise concerns about the company's operational efficiency and ability to generate returns for its stakeholders. Further analysis and strategic actions may be required to address the underlying issues impacting the company's profitability.