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.
Peer comparison
Dec 31, 2023