Fortive Corp (FTV)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	4,903,800	4,800,900	4,426,800	4,111,100	6,208,800
Payables	US$ in thousands	608,600	623,000	557,900	480,800	765,500
Payables turnover		8.06	7.71	7.93	8.55	8.11

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $4,903,800K ÷ $608,600K
= 8.06

The payables turnover ratio for Fortive Corp has shown a downward trend over the past five years, decreasing from 4.75 in 2019 to 4.06 in 2023. This indicates that the company is taking longer to pay off its trade payables. A lower payables turnover ratio may suggest that the company is stretching its payables or negotiating longer payment terms with its suppliers.

While a decreasing trend in payables turnover can be perceived as a negative signal, it is important to consider the context and reasons behind this trend. It could be a strategic decision by the company to optimize its working capital or manage cash flow more effectively. However, a significant decline in payables turnover may also raise concerns about the company's liquidity and ability to meet its short-term obligations.

Overall, further analysis and comparison with industry peers are necessary to gain a deeper understanding of the implications of Fortive Corp's decreasing payables turnover.