Arista Networks (ANET)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	2,781,440	2,159,460	1,465,750	1,155,330	1,155,570
Payables	US$ in thousands	435,059	232,572	202,636	134,235	92,105
Payables turnover		6.39	9.29	7.23	8.61	12.55

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $2,781,440K ÷ $435,059K
= 6.39

The payables turnover ratio for Arista Networks Inc has displayed variability over the past five years, ranging from 5.13 to 9.41. This ratio indicates how efficiently the company is managing its accounts payable by measuring how many times during a specific period the company is able to pay off its suppliers. A higher payables turnover ratio generally suggests that the company is paying its suppliers more frequently, which could be indicative of strong liquidity or negotiation power with vendors.

In the case of Arista Networks Inc, the payables turnover ratio decreased from 9.41 in 2019 to 5.13 in 2023. This decline may imply that the company is taking longer to pay its suppliers, which could potentially strain relationships with vendors or signal liquidity challenges. However, it's important to consider industry norms and other factors impacting the company when interpreting this ratio. Further analysis and comparison with industry benchmarks would provide a clearer understanding of Arista Networks Inc's payment efficiency and financial health.