Fortrea Holdings Inc. (FTRE)

Fortrea Holdings Inc.'s solvency ratios demonstrate a positive trend over the course of the year 2024. The Debt-to-assets ratio decreased from 0.37 in March to 0.29 by December, indicating that the company's proportion of debt relative to its total assets declined, which can be a positive sign of improved financial stability.

Similarly, the Debt-to-capital ratio decreased from 0.49 in March to 0.44 by December, reflecting a reduction in the company's reliance on debt financing compared to its total capital structure. This implies that Fortrea Holdings Inc. has been successful in managing its debt levels in relation to its overall capital base throughout the year.

The Debt-to-equity ratio also showed a decreasing trend from 0.98 in March to 0.77 by December, suggesting that the company has been decreasing its debt relative to its shareholders' equity. This can be viewed as a positive development as it indicates a strengthening of the company's financial position in terms of shareholder support.

Furthermore, the Financial leverage ratio fluctuated slightly but remained within a narrow range, indicating that Fortrea Holdings Inc. has maintained a stable level of financial leverage over the year. Overall, these solvency ratios reflect a favorable trend towards decreased debt reliance and improved financial stability for the company.

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Coverage ratios

The interest coverage ratio for Fortrea Holdings Inc. has been consistently declining throughout the year 2024. For the period ending March 31, 2024, the company's interest coverage ratio was at a concerning level of 0.12, indicating that Fortrea Holdings Inc. may have difficulty meeting its interest obligations with its operating income alone.

The subsequent quarters showed a further deterioration in the company's ability to cover its interest expenses. By June 30, 2024, the interest coverage ratio had decreased significantly to -0.53, suggesting that the company's operating income was insufficient to cover its interest payments. This negative ratio implies that Fortrea Holdings Inc. may be facing financial distress and could struggle to service its debt without additional support.

The trend continued in the following quarters, with the interest coverage ratio decreasing to -0.83 as of September 30, 2024, and further dropping to -1.31 by December 31, 2024. These numbers highlight the increasing financial strain on Fortrea Holdings Inc., raising concerns about its ability to meet its interest obligations and manage its debt effectively.

Overall, the declining interest coverage ratios indicate a worsening financial position for Fortrea Holdings Inc., suggesting potential liquidity challenges and a higher risk of default on its debt obligations. Investors and stakeholders should closely monitor the company's financial health and debt management strategies in light of these concerning trends.