Fortinet Inc (FTNT)

Financial leverage ratio

		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
Total assets	US$ in thousands	9,763,100	8,852,000	8,052,900	7,662,100	7,258,900	7,479,300	7,486,100	6,832,300	6,228,000	5,335,900	5,294,500	5,651,100	5,919,100	5,970,600	5,558,900	5,282,200	4,044,500	3,586,200	3,330,600	3,206,200
Total stockholders’ equity	US$ in thousands	1,493,800	908,100	288,200	-137,500	-463,400	74,100	321,200	11,400	-281,600	-634,700	-392,900	217,700	781,700	1,118,100	1,050,200	980,800	856,000	713,200	543,900	536,300
Financial leverage ratio		6.54	9.75	27.94	—	—	100.94	23.31	599.32	—	—	—	25.96	7.57	5.34	5.29	5.39	4.72	5.03	6.12	5.98

December 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $9,763,100K ÷ $1,493,800K
= 6.54

The financial leverage ratio of Fortinet Inc has fluctuated significantly over the past few years, indicating varying levels of debt utilization in the company's capital structure. The ratio was relatively stable around 5 to 6 from March 2020 to March 2021. However, there was a notable spike to 7.57 by December 2021, suggesting a higher reliance on debt financing during that period.

The financial leverage ratio experienced a sharp increase to 25.96 by March 2022, which may indicate a substantial increase in debt relative to equity, possibly signaling a higher financial risk for the company. This sudden surge in leverage could be a cause for concern as it may impact the company's overall financial stability and creditworthiness.

The ratio then dropped to 23.31 by June 2023, followed by a significant increase to 599.32 by March 2023, indicating extreme fluctuations in the company's leverage position. These drastic changes could be a result of various factors such as acquisitions, capital structure adjustments, or changes in debt levels.

By December 2024, the financial leverage ratio decreased to a more manageable level of 6.54, reflecting a potential effort to reduce debt and improve the company's financial position. It is essential for Fortinet Inc to closely monitor and manage its financial leverage ratio to ensure a healthy balance between debt and equity in its capital structure and mitigate excessive financial risk.