Fortinet Inc (FTNT)

Activity ratios

Short-term

Turnover ratios

	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
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
Receivables turnover	3.74	5.00	4.54	4.26	3.43	4.20	4.08	4.47	4.10	5.14	4.96	4.27	3.59	4.49	4.71	4.75	3.95	5.31	4.83	4.90
Payables turnover	17.00	13.36	13.72	13.09	12.17	13.04	13.71	14.20	15.44	15.04	15.00	14.28	12.53	17.82	15.40	18.35	16.04	17.20	19.79	19.97
Working capital turnover	7.39	4.60	3.55	4.22	5.91	19.96	11.81	5.07	2.58	1.76	1.52	1.43	2.84	3.32	3.94	4.58	1.64	1.81	1.82	1.76

Activity ratios provide insight into how efficiently a company is utilizing its assets and managing its operations. Let's analyze the activity ratios of Fortinet Inc based on the data provided:

1. Inventory Turnover:
- Fortinet's inventory turnover has been gradually decreasing over the quarters from Q1 2023 to Q4 2023. This suggests that the company is holding on to its inventory for a longer period before selling it.
- A lower inventory turnover may indicate potential issues such as overstocking, slowing sales, or inefficient inventory management.

2. Receivables Turnover:
- Fortinet's receivables turnover has shown fluctuation but generally remains at a healthy level across quarters.
- A higher receivables turnover ratio indicates that the company is efficiently collecting payments from customers, which is positive for cash flow and working capital management.

3. Payables Turnover:
- Fortinet's payables turnover ratio shows variability but remains relatively stable over time.
- A higher payables turnover ratio indicates that the company is effectively managing its payables by paying suppliers promptly, which can help maintain good relationships and leverage discounts.

4. Working Capital Turnover:
- Fortinet's working capital turnover has fluctuated significantly, with a notable decrease in recent quarters.
- A higher working capital turnover ratio suggests that the company is efficiently using its working capital to generate sales. The significant decline in this ratio may raise concerns about the company's ability to efficiently utilize its working capital.

Overall, while Fortinet Inc demonstrates strong performance in terms of receivables turnover and payables turnover, the decreasing trend in inventory turnover and the fluctuation in working capital turnover require further investigation to understand the underlying factors affecting the company's operational efficiency and financial health.

Average number of days

		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
Days of inventory on hand (DOH)	days	50.94	50.29	42.02	35.41	32.59	28.09	26.92	27.16	28.01	30.34	27.62	29.53	28.75	28.73	27.87	23.79	27.84	24.51	21.83	23.35
Days of sales outstanding (DSO)	days	97.64	72.93	80.45	85.74	106.40	86.92	89.36	81.61	89.07	71.03	73.57	85.54	101.62	81.33	77.47	76.81	92.34	68.70	75.57	74.50
Number of days of payables	days	21.47	27.31	26.61	27.89	29.98	28.00	26.63	25.70	23.65	24.27	24.34	25.56	29.12	20.49	23.71	19.89	22.76	21.22	18.45	18.28

Days of inventory on hand (DOH) measures how many days it takes for a company to sell its average level of inventory. For Fortinet Inc, the trend shows an increase in the number of days of inventory on hand over the quarters, indicating that the company is holding inventory for a longer period before selling it.

Days of sales outstanding (DSO) reflects how long it takes for a company to collect its accounts receivable. Fortinet Inc's DSO has fluctuated over the quarters, with a significant decrease in Q3 2023 compared to Q4 2023. This implies that the company has been able to collect its receivables faster in Q3 2023.

The number of days of payables represents how long a company takes to pay its suppliers. Fortinet Inc has shown a decreasing trend in the number of days of payables over the last few quarters, indicating that the company is paying its suppliers more quickly.

Overall, Fortinet Inc's activity ratios suggest that the company has been managing its inventory, receivables, and payables more efficiently in recent quarters, with improvements in collections and payments but with a slower inventory turnover.

Long-term

	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
Fixed asset turnover	5.02	4.89	4.98	5.04	4.82	4.55	4.61	4.49	4.81	5.58	5.73	5.50	5.77	5.85	5.98	6.03	6.25	6.68	6.84	6.86
Total asset turnover	0.72	0.68	0.65	0.68	0.69	0.76	0.71	0.63	0.56	0.52	0.52	0.51	0.64	0.68	0.71	0.70	0.55	0.58	0.58	0.58

The fixed asset turnover ratio measures how efficiently a company generates sales from its fixed assets. Fortinet Inc has consistently maintained a high fixed asset turnover ratio, ranging from 4.56 to 5.15 over the past eight quarters. This indicates that the company has been effective in utilizing its fixed assets to generate revenue.

On the other hand, the total asset turnover ratio reflects the company's ability to generate sales from all its assets. Fortinet Inc's total asset turnover ratio has shown some fluctuations, ranging from 0.63 to 0.77 during the same period. While the ratios are relatively lower compared to the fixed asset turnover, they still demonstrate that the company is efficiently using its total assets to generate revenue.

Overall, these ratios suggest that Fortinet Inc is effectively managing its assets to generate sales, with a particularly strong performance in utilizing its fixed assets. Investors and stakeholders can consider these ratios as indicators of the company's operational efficiency and asset utilization.