Fortinet Inc (FTNT)
Liquidity ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.47 | 1.34 | 1.32 | 1.20 | 1.19 | 1.30 | 1.39 | 1.34 | 1.24 | 1.07 | 1.12 | 1.28 | 1.55 | 1.80 | 1.96 | 2.01 | 1.50 | 1.45 | 1.37 | 1.32 |
| Quick ratio | 1.00 | 0.94 | 0.90 | 0.80 | 0.65 | 0.87 | 0.95 | 0.88 | 0.72 | 0.62 | 0.67 | 0.85 | 1.10 | 1.42 | 1.56 | 1.56 | 1.00 | 1.01 | 0.95 | 0.91 |
| Cash ratio | 1.00 | 0.94 | 0.90 | 0.80 | 0.65 | 0.87 | 0.95 | 0.88 | 0.72 | 0.62 | 0.67 | 0.85 | 1.10 | 1.42 | 1.56 | 1.56 | 1.00 | 1.01 | 0.95 | 0.91 |
Fortinet Inc's current ratio has shown variability over the years, ranging from a low of 1.07 to a high of 2.01. Although it has fluctuated, it generally stayed above 1, indicating that the company has had sufficient current assets to cover its current liabilities. The current ratio peaked in March 2021 before gradually declining until December 2024.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also exhibited fluctuations for Fortinet Inc. It ranged from a low of 0.62 to a high of 1.56. Similar to the current ratio, the quick ratio peaked in March 2021 before declining over the following years.
The cash ratio, which is the most conservative measure of liquidity, shows how much of the current liabilities can be covered by the company's cash and cash equivalents. Fortinet Inc's cash ratio mirrored the trends of the quick ratio, indicating the company's ability to meet its short-term obligations with cash on hand.
Overall, Fortinet Inc's liquidity ratios have shown fluctuations but generally remained at acceptable levels, with the current ratio consistently above 1, indicating the company's ability to meet its short-term financial obligations. However, the declining trend in the quick and cash ratios from their peak in March 2021 suggests a potential decrease in the company's ability to cover its current liabilities with its most liquid assets in recent years.
See also:
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
The cash conversion cycle of Fortinet Inc has shown some fluctuations over the years. The cash conversion cycle indicates the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
From March 31, 2020, to December 31, 2020, the cash conversion cycle increased gradually from 73.48 days to 89.52 days, indicating a longer period for Fortinet to convert its investments into cash. However, from March 31, 2021, to June 30, 2022, there was a decrease in the cycle, reaching the lowest point of 75.47 days. This suggests improved efficiency in converting investments into cash during this period.
From September 30, 2022, to December 31, 2024, there has been an overall fluctuation in the cash conversion cycle. The cycle peaked at 143.03 days on December 31, 2023, before decreasing to 99.48 days by December 31, 2024.
Analyzing these fluctuations can provide insights into Fortinet's management of working capital, inventory management, and cash flow operations. It is essential for the company to keep the cash conversion cycle at an optimal level to ensure smooth operations and financial stability.