Fortinet Inc (FTNT)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	50.94	32.59	28.01	28.75	27.84
Days of sales outstanding (DSO)	days	97.84	106.76	89.16	101.51	92.34
Number of days of payables	days	21.47	29.98	23.65	29.12	22.76
Cash conversion cycle	days	127.32	109.37	93.53	101.14	97.42

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 50.94 + 97.84 – 21.47
= 127.32

The cash conversion cycle for Fortinet Inc has shown a fluctuating trend over the past five years. In 2023, the cash conversion cycle increased significantly to 179.22 days, compared to 111.38 days in 2022. This indicates a potential deterioration in the company's ability to efficiently convert its resources into cash.

Although the cash conversion cycle was relatively stable in 2021 and 2020 at 100.98 days and 100.14 days respectively, there was a slight increase in 2019 to 107.65 days. This suggests that Fortinet Inc may have faced challenges in managing its working capital effectively during that year.

Overall, the increasing trend in the cash conversion cycle over the years indicates that Fortinet Inc may be taking longer to convert its investments in inventory and accounts receivable into cash. This could signal potential inefficiencies in the company's operations or supply chain management, which may require further analysis and strategic adjustments to improve cash flow and overall financial performance.