Arista Networks (ANET)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	1,938,610	671,707	620,813	893,219	1,111,290
Short-term investments	US$ in thousands	3,069,360	2,352,020	2,787,500	1,979,650	1,613,080
Receivables	US$ in thousands	1,024,570	923,096	516,509	389,540	391,987
Total current liabilities	US$ in thousands	1,909,610	1,293,530	1,109,830	768,243	597,074
Quick ratio		3.16	3.05	3.54	4.25	5.22

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,938,610K + $3,069,360K + $1,024,570K) ÷ $1,909,610K
= 3.16

The quick ratio of Arista Networks Inc has shown a declining trend over the past five years, from 5.41 in 2019 to 3.38 in 2023. A quick ratio above 1 indicates that the company has sufficient liquid assets to cover its short-term liabilities. Arista Networks Inc's quick ratio has consistently remained well above 1, suggesting strong liquidity and the ability to meet its short-term obligations comfortably.

Despite the downward trend, the company's quick ratio remains relatively high, indicating a healthy financial position. However, the decreasing trend in the quick ratio over the years may raise concerns about the company's ability to quickly convert its current assets into cash to meet its short-term liabilities. Monitoring this trend closely is important to ensure the company maintains its liquidity position and financial health.