Fortive Corp (FTV)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 38.78 | 39.96 | 40.80 | 42.27 | 40.44 |
| Days of sales outstanding (DSO) | days | 55.16 | 59.20 | 61.28 | 67.10 | 65.66 |
| Number of days of payables | days | 48.22 | 45.30 | 47.37 | 46.00 | 42.69 |
| Cash conversion cycle | days | 45.72 | 53.87 | 54.72 | 63.38 | 63.42 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 38.78 + 55.16 – 48.22
= 45.72
The cash conversion cycle of Fortive Corp has exhibited a generally improving trend over the past five years. From December 31, 2020, where it stood at 63.42 days, the cycle has decreased steadily to 45.72 days by December 31, 2024. This indicates that the company has become more efficient in managing its working capital and converting its inventory, accounts receivable, and accounts payable into cash.
The decreasing trend suggests that Fortive Corp has been able to streamline its operations, boost its sales, and enhance its collection processes while effectively managing its payables. A shorter cash conversion cycle signifies that the company is generating cash more quickly, which can lead to improved liquidity and financial health.
Overall, the decreasing trend in Fortive Corp's cash conversion cycle is a positive indicator of its operational efficiency and cash flow management.
Peer comparison
Dec 31, 2024