Fortinet Inc (FTNT)

Inventory turnover

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cost of revenue (ttm)	US$ in thousands	3,473,400	3,392,900	3,268,900	3,120,500	2,963,300	2,804,200	2,647,100	2,481,100	2,290,700	2,140,200	1,979,400	1,849,200	1,774,700	1,708,700	1,650,400	1,610,900	1,545,800	1,477,500	1,432,600	1,381,800
Inventory	US$ in thousands	484,800	467,500	376,300	302,700	264,600	215,800	195,200	184,600	175,800	177,900	149,800	149,600	139,800	134,500	126,000	105,000	117,900	99,200	85,700	88,400
Inventory turnover		7.16	7.26	8.69	10.31	11.20	12.99	13.56	13.44	13.03	12.03	13.21	12.36	12.69	12.70	13.10	15.34	13.11	14.89	16.72	15.63

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $3,473,400K ÷ $484,800K
= 7.16

Inventory turnover is a key financial ratio that measures how efficiently a company is managing its inventory. A higher inventory turnover indicates that the company is selling its goods quickly and not holding onto excess inventory. Fortinet Inc's inventory turnover has shown a decreasing trend over the past eight quarters, moving from 4.77 in Q1 2022 to 2.55 in Q4 2023.

The company's inventory turnover peaked at 4.84 in Q2 2022 and has been declining since then. This trend suggests that Fortinet Inc may be experiencing challenges in managing its inventory efficiently or that sales are slowing down relative to inventory levels.

A declining inventory turnover ratio can indicate potential issues such as overstocking, obsolete inventory, or slowing demand for the company's products. It may also suggest that the company is not effectively managing its supply chain or production processes.

It is important for Fortinet Inc to closely monitor its inventory turnover and take proactive measures to address any inefficiencies in inventory management. This could include optimizing inventory levels, improving forecasting accuracy, or implementing better inventory control systems to ensure that inventory is being effectively turned into sales.