Fortive Corp (FTV)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	39.96	40.80	42.27	40.44	24.47
Days of sales outstanding (DSO)	days	59.20	61.28	67.10	65.66	70.10
Number of days of payables	days	45.30	47.37	46.00	42.69	45.00
Cash conversion cycle	days	53.87	54.72	63.38	63.42	49.57

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 39.96 + 59.20 – 45.30
= 53.87

The cash conversion cycle of Fortive Corp has shown varying trends over the past five years. In 2023, the company's cash conversion cycle decreased to 47.23 days from 47.26 days in 2022. This indicates that the company took slightly less time to convert its investment in inventory into cash receipts from customers.

Comparing 2023 to 2021 and 2020, the cash conversion cycle has improved significantly, as it decreased from 57.27 days in 2021 to 47.23 days in 2023. A shorter cash conversion cycle implies that Fortive Corp is managing its cash flow more efficiently and effectively.

However, when comparing 2023 to 2019, the cash conversion cycle has slightly increased from 56.48 days to 47.23 days. This indicates that the company took slightly longer in 2023 to convert its working capital requirements into cash flows than it did in 2019.

Overall, Fortive Corp's cash conversion cycle has shown improvements in recent years, indicating better management of working capital and potential positive impacts on the company's liquidity and financial health.