Fortinet Inc (FTNT)

Inventory turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Cost of revenue (ttm)	US$ in thousands	1,157,600	1,159,000	1,213,300	1,234,100	1,237,200	1,218,600	1,183,900	1,138,900	1,084,900	1,015,900	944,100	880,200	783,000	721,700	649,700	597,900	570,000	543,500	528,400	521,600
Inventory	US$ in thousands	315,500	354,300	383,200	439,500	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
Inventory turnover		3.67	3.27	3.17	2.81	2.55	2.61	3.15	3.76	4.10	4.71	4.84	4.77	4.45	4.06	4.34	4.00	4.08	4.04	4.19	4.97

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $1,157,600K ÷ $315,500K
= 3.67

Fortinet Inc's inventory turnover has shown fluctuation over the past few years. The inventory turnover ratio indicates how efficiently the company manages its inventory by measuring how many times it sells and replaces its inventory during a specific period.

From March 31, 2020, to March 31, 2021, the inventory turnover remained relatively stable between 4.00 and 4.97, showing consistent efficiency in managing inventory. However, there was a slight decrease in inventory turnover from June 30, 2021, to September 30, 2021, where it dropped to 4.06 before increasing again to 4.45 by December 31, 2021.

There was a significant improvement in inventory turnover from March 31, 2022, to June 30, 2022, reaching a peak of 4.84. However, the ratio declined to 3.76 by March 31, 2023, indicating a decrease in inventory efficiency during that period. This downward trend continued with a further decrease to 2.61 by September 30, 2023, and 2.55 by December 31, 2023.

From March 31, 2024, there was a gradual improvement in inventory turnover, reaching 3.67 by December 31, 2024. The decrease in inventory turnover could suggest potential issues such as overstocking, slow-moving inventory, or poor sales performance. Conversely, an increasing inventory turnover ratio could indicate effective inventory management, successful sales strategies, or improved demand forecasting.

Overall, Fortinet Inc's inventory turnover has shown variability, and it is essential for the company to monitor this ratio closely to ensure optimal inventory management and operational efficiency.