Fortinet Inc. (NASDAQ:FTNT)

The current ratio showed a generally stable trend from March 2018 through December 2019, fluctuating in the range of approximately 1.69 to 1.88. However, a notable decline occurred starting in the first quarter of 2020, dropping to a low point around 1.24 by March 2023. This downward movement indicates a decreasing ability to cover short-term liabilities with current assets during this period, despite a brief increase to around 2.01 in the first quarter of 2021 preceding the decline.

The quick ratio followed a pattern similar to the current ratio, maintaining values roughly between 1.57 and 1.77 from early 2018 through the end of 2019. Beginning in 2020, the ratio declined significantly, falling below 1.0 in the last two quarters of 2022, which suggests tightening liquidity when considering only the most liquid assets. A partial recovery is seen by March 2023, reaching approximately 1.22. The temporary peak near 1.9 in March 2021 indicates a short period of strengthened liquid asset position before the subsequent decrease.

The cash ratio exhibited the highest values among the three liquidity ratios at the start of the period, ranging from about 1.27 to 1.56 during 2018 and into early 2021. Beginning in mid-2021, this ratio demonstrated a pronounced decline, reaching a low of about 0.62 by September 2022. Although it recovered slightly to 0.88 by March 2023, this overall trend points to a substantial reduction in cash and cash equivalents relative to current liabilities over the latter part of the timeline. This decline suggests diminishing immediate liquidity.

Total cash assets showed a general upward trend from March 2018 through December 2021, increasing from approximately 1.3 billion US dollars to over 3.1 billion US dollars. This growth was relatively steady with occasional periods of slower increase. However, beginning in early 2022, a noticeable decline occurred where cash assets fell from around 2.9 billion in March 2022 to approximately 1.7 billion by September 2022. Following this low, a recovery trend became apparent, with cash assets rising again to nearly 2.9 billion by March 2023. This pattern suggests a period of significant cash utilization or investment in early 2022, followed by replenishment or increased liquidity in early 2023.

Current liabilities consistently increased over the entire period from about 1.0 billion US dollars in March 2018 to over 3.2 billion by March 2023. The increase was steady and uninterrupted, indicating growing obligations due within the short term. The acceleration in current liabilities became more pronounced starting around 2020, which may reflect either expanded operations, increased short-term debt, or supplier commitments.

The cash ratio, which measures the ability to cover current liabilities with cash assets, showed fluctuations over the period. Initially, it was above 1.3 in early periods, indicating cash assets were substantially higher than current liabilities. Starting in 2020, the ratio dropped below 1, reaching a low of 0.62 in September 2022, reflecting that cash assets were insufficient to cover current liabilities purely with cash at these times. Following this trough, there was a modest improvement to 0.88 by March 2023, indicating some recovery in liquidity but still below the levels seen in earlier years.

The data illustrates a company with growing current liabilities over the analyzed period, outpacing the growth in total cash assets, especially after 2021. The significant dip in cash assets during 2022 alongside rising liabilities resulted in a cash ratio that fell below 1 for over two years, reaching its lowest point in late 2022. Despite subsequent improvement, the liquidity position remains less robust than in the initial years. These trends suggest tighter liquidity conditions and potentially increased reliance on other forms of financing or asset conversion beyond cash to meet obligations during the later periods.