Common-Size Income Statement
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- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Assets
- Enterprise Value (EV)
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Operating Profit Margin since 2009
- Return on Equity (ROE) since 2009
- Current Ratio since 2009
- Price to Book Value (P/BV) since 2009
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Fortinet Inc., common-size consolidated income statement
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Revenue Composition
- Over the five-year period, the percentage of revenue derived from product sales decreased initially from 37.44% in 2018 to 35.32% in 2020, followed by an increase to 40.31% in 2022. Conversely, service revenue as a percentage of total revenue rose steadily from 62.56% in 2018 to 64.68% in 2020, then declined to 59.69% by 2022. This indicates a shift in the revenue mix with an increasing emphasis on product sales in the later years.
- Cost of Revenue and Gross Profit
- The cost of revenue as a percentage of total revenue saw a decline from -25.01% in 2018 to -21.97% in 2020, suggesting improved cost management or operational efficiencies. However, it increased again to -24.56% by 2022. Gross profit correspondingly increased from 74.99% in 2018 to a peak of 78.03% in 2020, before decreasing to 75.44% in 2022, reflecting the fluctuations in cost of revenue.
- Operating Expenses
- Operating expenses showed a consistent downward trend as a percentage of revenue, decreasing from -62.17% in 2018 to -53.49% in 2022. This reduction is primarily driven by decreases in:
- - Research and Development expenses, from -13.57% to -11.6%
- - Sales and Marketing expenses, from -43.43% to -38.17%
- - General and Administrative expenses, from -5.16% to -3.83%
- Additionally, one-time gains related to intellectual property increased slightly in 2020 but then declined in subsequent years. Overall, the decrease in operating expenses indicates improved operational efficiency.
- Profitability
- Operating income improved over the period, rising from 12.82% in 2018 to 21.95% in 2022, with a peak in 2020 at 20.5%. This reflects the combined effects of margin expansion and reduced operating expenses. Income before taxes and loss from equity method investment also increased from 13.93% to 21.63%, showing stronger pre-tax profitability.
- Interest and Other Income/Expenses
- Interest income fluctuated, peaking at 1.97% in 2019 but declining thereafter to 0.39% in 2022. Interest expense appeared beginning 2021 at relatively low negative levels (-0.45% and -0.41%), indicating some debt-related costs. Other net expenses remained relatively stable and small as a percentage of revenue throughout the period.
- Taxation and Equity Investments
- The provision for income taxes shifted from a positive 4.51% in 2018, indicating tax benefits, to negative percentages (tax expenses) in subsequent years, reaching -0.7% in 2022. Loss from equity method investments emerged in 2021 and increased in 2022 to -1.54%, indicating adverse performance or valuation of these investments.
- Net Income
- Net income attributable to the company fluctuated, declining from 18.44% in 2018 to 15.14% in 2019, then increasing to 19.41% by 2022. This pattern suggests recovery and strengthening profitability after a dip in 2019. Net income including non-controlling interests mirrored this trend closely.