Fortinet Inc (FTNT)

Cash conversion cycle

		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	—	—	—	—	—
Cash conversion cycle	days	99.48	143.03	89.02	81.95	89.52

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 99.48 + — – —
= 99.48

The cash conversion cycle of Fortinet Inc has shown some fluctuation over the years based on the provided data. As of December 31, 2020, the company's cash conversion cycle was 89.52 days, indicating the number of days it takes for Fortinet to convert its investments in inventory and other resources into cash flows from sales.

By December 31, 2021, the cash conversion cycle had improved slightly to 81.95 days, suggesting that Fortinet was managing its working capital more efficiently, potentially leading to quicker cash generation.

However, there was a notable increase in the cash conversion cycle by December 31, 2023, reaching 143.03 days. This significant increase may imply challenges in managing inventory levels, collecting receivables, or stretching payment periods to suppliers, all of which can impact the company's cash flow position and liquidity.

Fortinet managed to bring down the cash conversion cycle to 99.48 days by December 31, 2024, which could indicate efforts to streamline operational processes or enhance working capital management practices.

Overall, fluctuations in the cash conversion cycle of Fortinet Inc reflect changes in the company's efficiency in converting its resources into cash, highlighting the importance of effective working capital management in ensuring adequate liquidity and sustainable financial performance.