Fortinet Inc (FTNT)
Cash conversion cycle
| 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 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | 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 |
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 fluctuations over the past few years, indicating changes in the company's efficiency in managing its working capital. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
Looking at the data provided, the cash conversion cycle ranged from a low of 73.48 days on March 31, 2020, to a high of 143.03 days on December 31, 2023. Generally, a shorter cash conversion cycle is considered favorable as it suggests that the company is able to efficiently manage its working capital and turn its inventory into cash quickly.
Fortinet Inc experienced a notable increase in its cash conversion cycle from June 30, 2023, reaching a peak of 143.03 days on December 31, 2023. This significant increase could indicate potential challenges in managing inventory, collecting receivables, or extending payment terms to suppliers during that period.
However, the company showed improvements in its cash conversion cycle from December 31, 2023, to June 30, 2024, decreasing to 115.28 days. This reduction suggests that Fortinet Inc may have implemented strategies to enhance its working capital management, resulting in a quicker conversion of inventory and accounts receivable into cash.
Overall, continuous monitoring and improvement of the cash conversion cycle are essential for Fortinet Inc to ensure efficient utilization of resources and maintain healthy liquidity levels.
Peer comparison
Dec 31, 2024