Arista Networks (ANET)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	216.81	255.26	217.99	161.89	151.54
Days of sales outstanding (DSO)	days	59.44	63.82	76.90	63.95	61.24
Number of days of payables	days	45.04	57.09	39.31	50.46	42.41
Cash conversion cycle	days	231.21	261.98	255.58	175.38	170.37

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 216.81 + 59.44 – 45.04
= 231.21

The cash conversion cycle of Arista Networks has shown an increasing trend over the years. In December 2020, the cash conversion cycle was 170.37 days, which increased to 175.38 days by December 2021. The trend continued with significant jumps to 255.58 days by December 2022, 261.98 days by December 2023, and then decreased slightly to 231.21 days by December 2024. This indicates that Arista Networks took longer to convert its investments in inventory and accounts receivable into cash over the years, which may suggest potential inefficiencies in its working capital management. Further analysis and comparison with industry benchmarks would provide more insights into the company's cash management practices.