Fortinet Inc (FTNT)

Activity ratios

Short-term

Turnover ratios

	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
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
Receivables turnover	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Payables turnover	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Working capital turnover	3.12	4.27	4.64	7.11	7.48	4.69	3.62	4.31	6.03	20.23	12.00	5.14	2.61	1.77	1.52	1.43	2.84	3.33	3.94	4.59

Fortinet Inc's Inventory Turnover ratio has been gradually decreasing from 4.97 in March 2020 to 3.67 in December 2024. This indicates that the company is taking longer to sell its inventory over the period. The Receivables Turnover and Payables Turnover ratios are not provided, which limits our ability to assess the efficiency of the company's collection and payment practices.

The Working Capital Turnover ratio demonstrates the company's ability to generate sales relative to its working capital. The ratio fluctuates significantly, indicating varying efficiency levels in the utilization of working capital to generate revenue. For example, a spike in the ratio from June 2022 to September 2022 suggests a substantial increase in sales compared to working capital during that period.

Overall, the Inventory Turnover ratio suggests potential inefficiencies in managing inventory, while the Working Capital Turnover ratio shows fluctuations in the utilization of working capital. It would be beneficial for Fortinet Inc to further analyze its inventory management and working capital strategies to improve operational efficiency.

Average number of days

		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
Days of inventory on hand (DOH)	days	99.48	111.58	115.28	129.99	143.03	140.03	116.01	97.01	89.02	77.53	75.47	76.55	81.95	89.97	84.16	91.33	89.52	90.33	87.04	73.48
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):
- Fortinet's DOH has fluctuated over the period from March 31, 2020, to December 31, 2024, ranging from a low of 75.47 days to a high of 143.03 days. This indicates the number of days the company holds inventory before it is sold.
- A decreasing trend in DOH over time may signify more efficient inventory management, while an increasing trend could indicate potential inventory management challenges or slow-moving inventory.

2. Days of Sales Outstanding (DSO):
- Unfortunately, the data for DSO is not provided, which typically represents how long it takes for a company to collect its accounts receivable. Without this information, it is challenging to assess Fortinet's efficiency in collecting sales revenue.

3. Number of Days of Payables:
- The data for the number of days of payables is also not available, which would have shown how long Fortinet takes to pay its suppliers and vendors. This ratio is crucial in evaluating the company's management of its payables.

In summary, Fortinet's inventory management, as indicated by the DOH ratio, has shown fluctuations over the period provided. However, without data on DSO and the number of days of payables, a comprehensive analysis of the company's overall efficiency in managing its working capital cycle is challenging. It would be helpful to have complete data on all three activity ratios to gain a more holistic understanding of Fortinet's operational effectiveness.

Long-term

	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
Fixed asset turnover	—	—	—	—	—	4.98	5.08	5.15	4.92	4.61	4.68	4.56	4.86	5.62	5.75	5.51	5.78	5.86	6.00	6.04
Total asset turnover	0.61	0.65	0.69	0.70	0.73	0.69	0.67	0.69	0.71	0.77	0.72	0.63	0.56	0.52	0.52	0.52	0.64	0.69	0.71	0.71

Fortinet Inc's fixed asset turnover ratio has shown a declining trend over the last few years, indicating that the company is generating fewer sales relative to its investment in fixed assets. The ratio decreased from 6.04 in March 2020 to 4.92 in December 2022, then slightly increased to 5.15 in March 2023.

On the other hand, the total asset turnover ratio reflects how efficiently the company is utilizing all its assets to generate sales. Fortinet Inc's total asset turnover ratio decreased sharply from 0.71 in March 2020 to 0.52 in March 2021 and remained relatively stable around 0.70-0.73 from December 2023 to March 2024.

Overall, the declining trend in fixed asset turnover and the initial decrease followed by stability in total asset turnover suggest that Fortinet Inc may be facing challenges in effectively utilizing its assets to generate revenues, particularly in the earlier years of the analyzed period. Further analysis and comparisons with industry peers are recommended to gain a deeper insight into the company's long-term activity efficiency.