Fortinet Inc (FTNT)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.67 | 2.55 | 4.10 | 4.45 | 4.08 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 3.12 | 7.48 | 6.03 | 2.61 | 2.85 |
Fortinet Inc's inventory turnover has shown a fluctuating trend over the years, with a peak of 4.45 in December 2021 and a low of 2.55 in December 2023. This indicates the company's efficiency in managing its inventory levels and converting them into sales. It is important for the company to monitor this ratio to ensure optimal inventory management.
The receivables turnover ratio data is not available for the years provided, suggesting that detailed information regarding the company's accounts receivable management efficiency is not accessible. Receivables turnover is a key metric that helps assess how quickly a company is able to collect payments from its customers.
Similarly, payables turnover data is also not available for the years provided. Payables turnover ratio measures how efficiently a company is managing its trade payables by determining how quickly it pays its suppliers. Analyzing this ratio could provide insights into the company's payment practices and relationships with suppliers.
Fortinet Inc's working capital turnover has shown a varying pattern, with a significant increase from 2.61 in December 2021 to 7.48 in December 2023. This indicates the company's ability to effectively utilize its working capital to generate revenue. A higher working capital turnover ratio generally signifies efficient use of resources, and the company's increasing trend in this ratio suggests improved operational efficiency.
Overall, while Fortinet Inc's inventory turnover and working capital turnover ratios demonstrate decent operational efficiency, the absence of data for receivables turnover and payables turnover limits a comprehensive analysis of the company's activity ratios. Monitoring and analyzing all relevant activity ratios can provide a more comprehensive understanding of Fortinet Inc's overall operational performance and financial health.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 99.48 | 143.03 | 89.02 | 81.95 | 89.52 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Based on the provided data for Fortinet Inc, let's analyze the activity ratios:
1. Days of Inventory on Hand (DOH)
- The DOH measures the average number of days that a company holds its inventory before selling it.
- Fortinet Inc's DOH has fluctuated over the years:
- In December 2020, it was 89.52 days.
- By December 2021, it decreased to 81.95 days.
- In December 2022, it slightly increased to 89.02 days.
- However, there was a significant increase observed in December 2023, reaching 143.03 days.
- By December 2024, the DOH decreased to 99.48 days.
- The decreasing trend in the most recent year indicates that Fortinet Inc was able to manage its inventory more efficiently, potentially leading to cost savings and improved liquidity.
2. Days of Sales Outstanding (DSO)
- DSO measures the average number of days it takes for a company to collect payment after a sale is made.
- The data provided does not include any information on DSO for Fortinet Inc across the years.
- Without data on DSO, it's challenging to assess the company's efficiency in collecting receivables and managing cash flow from sales.
3. Number of Days of Payables
- This ratio indicates the average number of days it takes for a company to pay its suppliers.
- The data provided does not include any information on the number of days of payables for Fortinet Inc for the years specified.
- Lack of data on payables hinders the analysis of the company's payment practices and working capital management.
In conclusion, based on the available information, we can see that Fortinet Inc has shown improvements in managing its inventory levels, as indicated by the decreasing trend in the Days of Inventory on Hand ratio. However, without data on Days of Sales Outstanding and Number of Days of Payables, a comprehensive assessment of the company's overall efficiency in managing its working capital and cash flows is limited.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 4.92 | 4.86 | 5.79 |
| Total asset turnover | 0.61 | 0.73 | 0.71 | 0.56 | 0.64 |
The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate sales. In the case of Fortinet Inc, we observe a declining trend in fixed asset turnover from 5.79 in 2020 to 4.86 in 2021, followed by a slight increase to 4.92 in 2022. However, there is missing data for 2023 and 2024, so we cannot evaluate the trend for those years.
A higher fixed asset turnover ratio indicates that the company is generating more revenue for each dollar invested in fixed assets, emphasizing good asset utilization. The declining trend in Fortinet's fixed asset turnover suggests a decrease in efficiency in generating sales from its fixed assets over the period evaluated.
The total asset turnover ratio measures how efficiently a company utilizes its total assets to generate revenue. Fortinet Inc's total asset turnover ratio decreased from 0.64 in 2020 to 0.56 in 2021, then increased to 0.71 in 2022 and further to 0.73 in 2023, before declining slightly to 0.61 in 2024.
An increasing total asset turnover ratio generally indicates improved asset utilization and efficiency in generating sales from total assets. The fluctuating trend in Fortinet's total asset turnover ratios suggests varying efficiency in utilizing total assets to generate revenue during the years analyzed.
Overall, the analysis of Fortinet Inc's long-term activity ratios indicates fluctuations in the efficiency of the company in utilizing its fixed and total assets to generate sales over the period under review. Further analysis and contextual information would be required to interpret the significance of these trends more comprehensively.