Fortinet Inc (FTNT)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	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
Receivables	US$ in thousands	1,402,000	1,261,700	807,700	720,000	544,300
Total current liabilities	US$ in thousands	3,719,000	3,078,400	2,318,100	1,829,500	1,455,800
Quick ratio		1.03	1.13	1.45	1.40	1.79

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,397,900K + $1,042,500K + $1,402,000K) ÷ $3,719,000K
= 1.03

The quick ratio measures a company's ability to meet its short-term obligations using its most liquid assets. Looking at Fortinet Inc's quick ratio over the past five years, we can observe a decreasing trend from 2019 to 2023. In 2019, the quick ratio was at its highest of 1.80, indicating a strong ability to cover short-term liabilities with liquid assets. However, this ratio has been gradually declining year over year.

As of December 31, 2023, Fortinet Inc's quick ratio stands at 1.06, which is lower than the ratios reported in the previous years. This decrease suggests that the company may have a slight reduction in its ability to meet immediate payment obligations with its most liquid assets compared to the prior years. While a quick ratio above 1.0 generally indicates a company can meet its short-term obligations, the downward trend raises some concerns about liquidity management.

It is essential for Fortinet Inc to closely monitor its liquidity position to ensure it maintains an adequate level of liquid assets to cover short-term liabilities as the decreasing trend in the quick ratio could indicate potential challenges in meeting its immediate financial obligations.