Arista Networks (ANET)

Working capital turnover

		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
Revenue (ttm)	US$ in thousands	7,003,150	6,613,150	6,311,670	6,080,190	5,860,170	5,595,280	5,262,620	4,855,590	4,381,306	3,930,215	3,502,112	3,157,541	2,948,037	2,772,060	2,628,794	2,462,045	2,317,512	2,221,576	2,274,860	2,342,611
Total current assets	US$ in thousands	11,910,800	10,877,900	9,842,320	8,926,280	8,400,060	7,655,000	6,851,560	6,270,530	5,550,750	5,031,680	4,729,200	5,105,170	4,812,680	4,523,960	4,328,400	4,002,900	3,837,000	3,653,870	3,576,880	3,336,900
Total current liabilities	US$ in thousands	2,732,220	2,434,370	2,161,880	1,783,060	1,919,440	1,846,720	1,655,790	1,584,910	1,293,530	1,254,910	1,278,030	1,369,000	1,109,830	893,387	859,935	786,532	768,243	664,783	640,181	573,007
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

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $7,003,150K ÷ ($11,910,800K – $2,732,220K)
= 0.76

Arista Networks' working capital turnover has exhibited some fluctuations over the periods analyzed. The working capital turnover ratio represents how efficiently the company utilizes its working capital to generate sales revenue. A higher ratio indicates a more efficient use of working capital.

From March 31, 2020, to March 31, 2023, the working capital turnover ratio generally increased, suggesting an improvement in Arista Networks' ability to convert its working capital into sales. However, from March 31, 2023, to December 31, 2024, the ratio experienced a decline.

The ratio peaked at 1.04 in March 31, 2023, and remained relatively stable around this level until June 30, 2023, before decreasing to 0.90 by December 31, 2023. From this point onwards, the ratio continued to decline steadily, reaching a low of 0.76 by December 31, 2024.

Overall, while the working capital turnover ratio showed improvement initially, the recent downward trend may indicate challenges in effectively utilizing working capital to support sales activities. It is essential for Arista Networks to closely monitor its working capital management to optimize operational efficiency and financial performance.