Fortinet Inc (FTNT)

Cash conversion cycle

		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
Cash conversion cycle	days	127.12	95.91	95.86	93.26	109.02	87.01	89.65	83.07	93.44	77.10	76.85	89.51	101.25	89.57	81.63	80.71	97.42	71.99	78.96	79.57

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 50.94 + 97.64 – 21.47
= 127.12

The cash conversion cycle of Fortinet Inc has shown fluctuations over the past eight quarters. In Q4 2023, the cash conversion cycle was 179.22 days, indicating an increase from the previous quarter. However, this is significantly higher compared to Q1 2023 when it was 104.59 days, suggesting slower conversion of investments in inventory to cash.

In general, the trend shows an improvement in efficiency from Q1 2022 to Q3 2023, with the cycle decreasing from 84.54 days to 135.51 days. This suggests that Fortinet Inc has been managing its working capital more effectively during this period. However, the recent increase in the cash conversion cycle in Q4 2023 may be a cause for concern as it indicates a slowdown in the conversion of resources into cash.

Overall, Fortinet Inc should continue to monitor its cash conversion cycle closely to ensure efficient management of working capital and timely conversion of investments into cash.