Arista Networks (ANET)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Inventory turnover	1.68	1.66	1.53	1.39	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
Receivables turnover	6.14	5.85	5.14	5.58	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
Payables turnover	8.10	10.14	9.53	12.61	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
Working capital turnover	0.76	0.78	0.82	0.85	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

Arista Networks' activity ratios provide insight into how efficiently the company is managing its assets and operations.

1. Inventory Turnover: Arista's inventory turnover has been gradually declining from 4.28 in March 2020 to 1.68 in December 2024. This indicates that the company is selling its inventory less frequently over time, potentially signaling inefficiencies in inventory management or declining sales.

2. Receivables Turnover: The receivables turnover ratio fluctuates over the years, ranging from 4.75 to 7.40. A higher turnover ratio indicates that Arista is collecting its receivables more quickly, which is positive as it suggests effective credit management and liquidity.

3. Payables Turnover: Arista's payables turnover varies but generally shows consistent payment to suppliers. The ratio ranged from 6.29 to 13.22, indicating that the company is managing its payables effectively, although this can also matter the company's credit terms with suppliers.

4. Working Capital Turnover: The working capital turnover ratio shows how effectively Arista is using its working capital to generate sales. The ratio ranges from 0.74 to 1.04, with higher numbers indicating better efficiency in utilizing working capital to drive revenue. Arista's performance in this area has been relatively stable over time.

Overall, the trend in Arista Networks' activity ratios suggests some areas for improvement, particularly in inventory turnover. Management may need to focus on optimizing inventory levels and monitoring sales to enhance operational efficiency and profitability.

Average number of days

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Days of inventory on hand (DOH)	days	216.80	220.35	238.43	262.48	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
Days of sales outstanding (DSO)	days	59.44	62.42	70.95	65.44	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
Number of days of payables	days	45.04	36.00	38.31	28.94	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

Arista Networks' activity ratios paint a picture of the company's efficiency in managing its inventory, sales, and payables.

1. Days of Inventory on Hand (DOH): Arista Networks' DOH has been on an increasing trend over the years, indicating that the company is holding inventory for longer periods. This could be a cause for concern as it ties up capital and may lead to higher storage and holding costs. The DOH increased from 85.24 days in March 2020 to 216.80 days in December 2024.

2. Days of Sales Outstanding (DSO): Arista Networks has shown relatively consistent performance in terms of collecting receivables from customers. The DSO metric reflects the number of days the company takes to collect payment after making a sale. The company's DSO ranged from 49.32 days in September 2020 to 70.95 days in June 2024, with some fluctuations throughout the periods.

3. Number of Days of Payables: Arista Networks has been effectively managing its payables, with the number of days of payables generally decreasing over the years. This indicates that the company is taking more time to pay its suppliers, which could imply better cash flow management. The days of payables decreased from 55.24 days in September 2020 to 36.00 days in September 2024.

Overall, Arista Networks may need to focus on optimizing its inventory management to reduce holding costs and improve cash flow while maintaining its efficient collection of receivables and management of payables.

Long-term

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Fixed asset turnover	70.85	71.08	65.55	62.08	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
Total asset turnover	0.50	0.51	0.54	0.58	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

Arista Networks' Fixed Asset Turnover ratio has been showing an increasing trend from March 31, 2020 to December 31, 2024, indicating that the company is generating more revenue per dollar of fixed assets invested. The ratio increased from 61.96 in March 2020 to 70.85 in December 2024, peaking at 71.08 on September 30, 2024.

On the other hand, the Total Asset Turnover ratio has been fluctuating over the same period, starting at 0.57 in March 2020, reaching a high of 0.65 on December 31, 2022, and then declining to 0.50 by December 31, 2024. This suggests that the company's efficiency in generating sales from its total assets has varied over time.

Overall, Arista Networks shows a favorable trend in its Fixed Asset Turnover ratio, indicating improved efficiency in utilizing fixed assets to generate revenue. However, the fluctuating Total Asset Turnover ratio suggests that the company's effectiveness in utilizing all assets to generate sales has been less consistent.