Fortinet Inc (FTNT)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.14 | 0.16 | 0.17 | 0.00 | 0.00 |
| Debt-to-capital ratio | 1.88 | 1.40 | 0.56 | 0.00 | 0.00 |
| Debt-to-equity ratio | — | — | 1.26 | 0.00 | 0.00 |
| Financial leverage ratio | — | — | 7.57 | 4.72 | 2.89 |
Fortinet Inc's solvency ratios reveal a consistent and favorable trend over the years, indicating a strong financial position and low financial risk. The debt-to-assets ratio has been declining steadily from 2019 to 2023, decreasing from 0.00 in 2019 and 2020 to 0.14 in 2023. This suggests that the company has effectively managed its debt levels in relation to its total assets, improving its ability to cover debt obligations.
Similarly, the debt-to-capital ratio has exhibited a decreasing trend from 2021 to 2023, declining from 0.56 in 2021 to 1.88 in 2023. This signifies that Fortinet has reduced its reliance on debt financing in relation to its capital structure, indicating a stronger financial position.
The debt-to-equity ratio was not provided for 2020, 2021, and 2022, but it was 1.26 in 2023. This ratio indicates that the company has $1.26 in debt for every dollar of equity. While this ratio is higher compared to the debt-to-assets and debt-to-capital ratios, it still suggests a reasonable level of leverage.
The financial leverage ratio has shown a notable increase over the years, from 2.94 in 2019 to 7.57 in 2023. This ratio highlights the extent to which Fortinet is using debt to finance its operations and growth. The increase in this ratio indicates a higher reliance on debt financing, which can magnify returns but also increase financial risk.
Overall, Fortinet Inc's solvency ratios paint a picture of a company with a well-managed debt structure, a strong capital base, and improving debt management practices. This suggests that the company is in a solid financial position to meet its debt obligations and support its growth strategies effectively.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 62.50 | 50.34 | 42.67 | — | — |
The interest coverage ratio for Fortinet Inc has shown significant variability over the past five years. In 2022, the interest coverage ratio was notably high at 1,608.33, indicating the company's strong ability to cover its interest expenses with its operating income. This could be attributed to either lower interest expenses or higher operating income during that period.
In contrast, the interest coverage ratio in 2021 was much lower at 62.10, suggesting a decrease in the company's ability to cover its interest obligations from its operating earnings. The absence of data for 2020 and 2019 limits a comprehensive trend analysis, but it is worth noting that the company did not report any interest coverage figure for those years.
Overall, the substantial fluctuations in Fortinet Inc's interest coverage ratio imply varying levels of financial risk and stability in managing debt obligations. It would be important to monitor future financial reports to assess the company's ability to consistently cover its interest expenses and maintain financial health.