Fortinet Inc (FTNT)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	1,397,900	1,682,900	1,319,100	1,061,800	1,222,500
Short-term investments	US$ in thousands	1,042,500	528,100	1,232,600	775,500	843,100
Total current liabilities	US$ in thousands	3,719,000	3,078,400	2,318,100	1,829,500	1,455,800
Cash ratio		0.66	0.72	1.10	1.00	1.42

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($1,397,900K + $1,042,500K) ÷ $3,719,000K
= 0.66

The cash ratio measures a company's ability to cover its short-term liabilities with its available cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations without relying on external financing.

Fortinet Inc's cash ratio has been gradually decreasing over the past five years, from 1.43 in 2019 to 0.68 in 2023. This downward trend suggests a potential concern regarding the company's liquidity position and its ability to cover short-term liabilities solely with its existing cash resources.

While a cash ratio above 1.0 is generally considered healthy, the downward trend in Fortinet Inc's cash ratio may indicate a need to closely monitor the company's liquidity position and cash management practices. It is important for the company to ensure it maintains adequate levels of cash reserves to meet its short-term financial obligations effectively.