Balance Sheet: Liabilities and Stockholders’ Equity
The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.
Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.
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Fortinet Inc. pages available for free this week:
- Income Statement
- Cash Flow Statement
- Common-Size Balance Sheet: Assets
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Capital Asset Pricing Model (CAPM)
- Debt to Equity since 2009
- Analysis of Debt
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Fortinet Inc., consolidated balance sheet: liabilities and stockholders’ equity
US$ in thousands
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).
- Liabilities Trends
- The total liabilities have shown a consistent upward trend over the observed periods, rising from approximately $2.07 billion in 2018 to about $6.51 billion in 2022. Current liabilities increased from $1.26 billion to $3.08 billion, reflecting a significant growth in short-term obligations. Notably, accounts payable and accrued liabilities both exhibited steady increases, with accounts payable nearly tripling and accrued liabilities more than doubling by 2022. Deferred revenue, a major component of liabilities, also expanded substantially from $965.9 million to $2.35 billion, indicating growth in unearned revenue or prepayments from customers. Long-term debt became material in 2021, with values around $988 million and $990 million in 2021 and 2022 respectively, suggesting new borrowings or debt instruments undertaken during this time. Other liabilities showed moderate growth, increasing from $13 million to $82 million.
- Equity Dynamics
- Stockholders' equity presented mixed trends. The total equity experienced growth between 2018 and 2019, increasing from about $1.01 billion to $1.32 billion, followed by a decline in subsequent years, reaching negative equity of approximately -$282 million by 2022. This decline was largely influenced by a substantial increase in accumulated deficit (retained earnings), which shifted from a positive $140.3 million in 2019 to a significant negative balance exceeding $1.546 billion in 2022. Additional paid-in capital grew steadily but at a much slower pace, while other comprehensive income/loss shifted negatively, particularly in 2021 and 2022, worsening the equity position. An increase in common stock par value in 2022 suggests a change in capital structure or issuance of stock shares during that year. Non-controlling interests appeared only in 2021 at $16.7 million but were absent in other years.
- Overall Financial Position
- The total liabilities and equity combination grew from approximately $3.08 billion in 2018 to $6.23 billion in 2022, reflecting company expansion but accompanied by increasing financial risk implied by declining equity. The growth in liabilities outpaced that of equity, resulting in an overall deficit in stockholders' equity by the final period. This condition may indicate operational losses or substantial expenditures surpassing retained earnings accumulation, combined with increased leverage evidenced by rising long-term debt and current liabilities.