Arista Networks (ANET)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 1.43 | 1.67 | 2.25 | 2.41 | 4.74 | |
| DOH | days | 255.26 | 217.99 | 161.89 | 151.54 | 77.01 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 1.43
= 255.26
Arista Networks Inc's Days of Inventory on Hand (DOH) has shown an increasing trend over the past five years. The DOH has risen from 102.72 days as of December 31, 2019, to 318.40 days as of December 31, 2023. This indicates that the company is taking longer to sell its inventory, which could potentially result in higher carrying costs and the risk of obsolete inventory.
The significant increase in DOH suggests that Arista Networks Inc may be experiencing challenges in managing its inventory efficiently. It is essential for the company to address this trend to avoid potential issues such as inventory obsolescence, storage costs, and tying up working capital in excess inventory.
Management should consider implementing inventory management strategies such as improving demand forecasting, optimizing supply chain efficiencies, and enhancing inventory turnover ratios to reduce the number of days inventory is held on hand. By effectively managing its inventory levels, Arista Networks Inc can improve its liquidity, reduce costs, and enhance overall operational performance.
Peer comparison
Dec 31, 2023