Fortive Corp (FTV)

Activity ratios

Short-term

Turnover ratios

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Inventory turnover 9.17 8.86 8.72 8.55 8.95 8.39 8.42 8.16 8.63 5.69 6.87 7.73 9.03 9.34 9.33 9.87 14.92 6.44 5.62 5.63
Receivables turnover 6.17 6.34 6.24 6.14 5.96 6.22 — — 5.65 — — — 7.88 5.85 6.25 5.58 5.23 4.70 4.75 5.48
Payables turnover 8.09 8.52 8.36 8.22 7.71 8.21 — — 7.93 — — — 8.55 7.95 8.46 8.62 8.11 6.31 5.58 5.13
Working capital turnover 3.15 118.99 — — — — — — — — 11.15 18.31 4.02 9.62 18.86 5.55 32.69 11.39 9.68 1.99

Fortive Corp's activity ratios provide insight into the efficiency with which the company manages its operational assets and liabilities.

- Inventory turnover remained relatively stable around 4.40 to 4.60 during the quarters presented. This indicates that Fortive Corp efficiently rotates its inventory, with higher values suggesting faster inventory turnover.

- Receivables turnover ranged from 6.08 to 6.50, showcasing the company's ability to collect outstanding receivables effectively. Higher values imply faster collection of receivables.

- Payables turnover fluctuated between 3.95 and 4.30, reflecting the speed at which Fortive Corp pays off its trade payables. A higher turnover ratio suggests the company is managing its payables efficiently.

- The sudden spike in Working Capital turnover in Q3 2023 to 121.94 followed by lack of data in subsequent quarters suggests a potential anomaly or data discrepancy that requires further investigation. Working capital turnover is vital for assessing the efficiency of utilizing working capital to generate sales.

Overall, Fortive Corp's activity ratios demonstrate a generally sound operational efficiency in managing inventory, receivables, and payables, except for the anomaly in the Working Capital turnover in Q3 2023 that requires further analysis.

Average number of days

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Days of inventory on hand (DOH) days 39.82 41.18 41.86 42.70 40.80 43.51 43.36 44.71 42.27 64.16 53.12 47.23 40.44 39.08 39.13 36.96 24.47 56.71 64.99 64.85
Days of sales outstanding (DSO) days 59.20 57.58 58.54 59.40 61.28 58.68 — — 64.61 — — — 46.35 62.44 58.42 65.46 69.76 77.69 76.88 66.65
Number of days of payables days 45.14 42.84 43.68 44.41 47.37 44.45 — — 46.00 — — — 42.69 45.89 43.17 42.36 45.00 57.81 65.38 71.20

To analyze Fortive Corp's activity ratios, we will focus on Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.

1. Days of Inventory on Hand (DOH):
- The average DOH for Fortive Corp over the past eight quarters is approximately 82 days.
- The trend shows a slight fluctuation in inventory management efficiency, with the DOH ranging from 79.30 days to 88.39 days.
- A lower DOH indicates better inventory management, as products are sold quickly and turnover is high.

2. Days of Sales Outstanding (DSO):
- The average DSO for Fortive Corp over the same period is around 59 days.
- The trend in DSO shows variability, ranging from 56.19 days to 63.12 days.
- A lower DSO is preferable, as it signifies that the company is collecting receivables promptly, improving cash flow efficiency.

3. Number of Days of Payables:
- The average number of days of payables for Fortive Corp in the past eight quarters is approximately 89 days.
- The trend indicates some variability, with the number of days of payables ranging from 84.86 days to 92.35 days.
- A longer period of payables suggests that the company is taking longer to pay its suppliers, which can indicate stronger cash flow management.

Overall, analyzing these activity ratios provides insight into Fortive Corp's efficiency in managing its inventory, receivables, and payables. The fluctuations in these ratios over time can help identify areas of improvement or areas where the company is performing well in terms of operational efficiency.

Long-term

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Fixed asset turnover 13.47 13.62 13.69 13.58 13.53 13.83 13.43 12.97 13.29 13.18 14.41 14.56 15.12 13.74 13.57 14.13 17.41 12.04 12.13 13.41
Total asset turnover 0.35 0.37 0.37 0.37 0.36 0.35 0.34 0.33 0.32 0.35 0.40 0.42 0.40 0.41 0.42 0.43 0.42 0.38 0.38 0.40

Fortive Corp has shown consistent performance in utilizing its fixed assets efficiently over the quarters, with fixed asset turnover ratios ranging from 13.53 to 14.02. This indicates the company generated between $13.53 to $14.02 in sales for every dollar invested in fixed assets. The stable and relatively high fixed asset turnover suggests the company's productive use of its fixed assets to generate revenue.

Moreover, the total asset turnover ratio for Fortive Corp has improved gradually, ranging from 0.33 to 0.38. This indicates that the company generated between $0.33 to $0.38 in sales for every dollar invested in total assets. The increasing trend in total asset turnover reflects management's effectiveness in generating revenue relative to its total asset base.

Overall, Fortive Corp's long-term activity ratios demonstrate its efficiency in utilizing both fixed and total assets to generate sales, indicating effective asset management and operational performance over the quarters.