Question · Q3 2025
Dan Rizwan asked about the drivers of free cash flow, specifically how working capital, particularly as a percentage of sales, should be considered over the long term on an annual basis.
Answer
EVP and CFO David Johnson noted that year-over-year free cash flow improvement has been significantly driven by working capital, with increases in receivables due to volume/sales growth and a decline in inventory. He mentioned that Q4 typically involves inventory building. For long-term working capital as a percentage of sales, Johnson suggested that the average of the last couple of years serves as a good indication for future plans.
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