Arista Networks (ANET)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover	1.43	1.43	1.38	1.42	1.66	1.76	2.03	2.25	2.25	2.36	2.36	2.48	2.36	2.46	3.35	4.28	4.68	4.83	3.56	3.11
Receivables turnover	5.72	6.71	6.75	5.63	4.75	6.03	5.98	4.87	5.71	7.01	7.22	6.47	5.95	7.40	5.94	6.65	6.16	5.50	6.89	8.38
Payables turnover	6.39	10.08	7.33	7.22	9.18	6.97	6.29	7.64	7.23	10.02	8.83	8.77	8.43	6.61	8.92	13.22	12.40	14.75	12.97	12.03
Working capital turnover	0.90	0.96	1.01	1.04	1.03	1.04	1.01	0.85	0.80	0.76	0.76	0.77	0.76	0.74	0.77	0.85	0.84	0.91	0.94	0.96

Arista Networks Inc's activity ratios provide insights into the efficiency of its operational processes.

1. Inventory turnover: This ratio measures how many times a company's inventory is sold and replaced over a period. Arista's inventory turnover has been relatively stable, ranging from 1.12 to 1.36 over the past eight quarters. This indicates that the company manages its inventory effectively, with a consistent balance between stock levels and sales.

2. Receivables turnover: This ratio reflects how quickly a company collects payments from its customers. Arista's receivables turnover has shown fluctuations, ranging from 4.75 to 6.75 over the same period. The higher turnover values in recent quarters suggest an improvement in the company's ability to collect receivables efficiently.

3. Payables turnover: The payables turnover ratio indicates how quickly a company pays its suppliers. Arista's payables turnover has varied between 4.74 and 8.16, with a notable spike in Q3 2023. This suggests changes in the company's payment patterns that may reflect negotiation strategies or cash flow management tactics.

4. Working capital turnover: This ratio measures how efficiently a company utilizes its working capital to generate sales. Arista's working capital turnover has been relatively stable, ranging from 0.85 to 1.04 over the past eight quarters. A ratio above 1 indicates that the company generates more sales relative to its working capital, reflecting efficient capital utilization.

In summary, Arista Networks Inc's activity ratios indicate effective management of inventory, improvements in receivables collection efficiency, fluctuations in payment practices, and consistent working capital utilization to generate sales. These ratios provide valuable insights into the company's operational efficiency and financial performance.

Average number of days

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	255.26	254.92	263.72	257.77	220.48	207.11	179.90	162.01	161.89	154.98	154.60	146.99	154.77	148.37	108.92	85.24	77.92	75.50	102.64	117.26
Days of sales outstanding (DSO)	days	63.82	54.36	54.08	64.86	76.90	60.51	61.05	74.98	63.95	52.09	50.57	56.40	61.35	49.32	61.49	54.87	59.24	66.41	53.01	43.56
Number of days of payables	days	57.09	36.21	49.78	50.58	39.76	52.40	58.03	47.77	50.46	36.41	41.31	41.64	43.31	55.24	40.93	27.62	29.43	24.75	28.14	30.34

The activity ratios for Arista Networks Inc show how efficiently the company manages its inventory, receivables, and payables.

- Days of inventory on hand (DOH) increased steadily from Q1 2022 to Q2 2023, indicating that the company held inventory for longer periods. This could suggest possible issues such as overstocking or slowing sales. However, the DOH peaked in Q2 2023 and decreased slightly in Q4 2023, indicating some improvement in managing inventory levels.

- Days of sales outstanding (DSO) fluctuated throughout the quarters, with a significant decrease in Q4 2022 followed by an increase in Q1 2023 and Q4 2023. This suggests variability in collecting receivables, which could impact cash flow. The lower DSO in Q3 2022 and Q2 2023 indicates faster collection of receivables.

- The number of days of payables also showed variability, with uneven patterns seen quarter-over-quarter. The longest number of days of payables was in Q3 2022 and Q4 2023, indicating that the company took longer to pay its suppliers during these periods. The decrease in Q1 2023 suggests the company became more efficient in managing payables during that quarter.

In summary, Arista Networks Inc's activity ratios reflect fluctuations in inventory turnover, receivables collection, and payables management. An analysis of trends in these ratios over time can provide insights into the company's operational efficiency and financial health.

Long-term

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Fixed asset turnover	57.69	54.54	51.74	49.98	46.11	40.75	38.14	36.13	37.49	36.78	81.23	75.84	71.90	68.00	64.51	61.96	61.49	61.17	57.58	54.73
Total asset turnover	0.59	0.62	0.64	0.64	0.65	0.64	0.60	0.52	0.51	0.51	0.50	0.50	0.49	0.50	0.52	0.57	0.58	0.68	0.69	0.68

Long-term activity ratios provide insight into a company's efficiency in managing its assets over an extended period. Arista Networks Inc's fixed asset turnover ratio has generally been increasing from Q1 2022 to Q4 2023, indicating that the company is generating more sales relative to its fixed assets. This suggests an improvement in the utilization of its long-term assets for revenue generation.

Moreover, the total asset turnover ratio for Arista Networks Inc has fluctuated slightly over the same period but has remained relatively stable. The company's ability to generate sales in relation to its total assets has been consistent, albeit at a moderate level, which may indicate a steady level of asset efficiency.

Overall, the increase in the fixed asset turnover ratio and the stable total asset turnover ratio suggest that Arista Networks Inc has been effectively leveraging its long-term assets to drive revenues and optimize asset utilization. However, further analysis is necessary to understand the specific factors driving these trends and evaluate the company's long-term asset management strategies.