Arista Networks (ANET)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 61.95% | 61.07% | 63.80% | 63.82% | 63.95% |
| Operating profit margin | 38.52% | 34.86% | 31.37% | 30.14% | 33.37% |
| Pretax margin | 41.33% | 36.10% | 31.58% | 31.82% | 35.70% |
| Net profit margin | 35.62% | 30.87% | 28.52% | 27.33% | 35.61% |
Over the five-year period from 2019 to 2023, Arista Networks Inc has demonstrated relatively stable and healthy profitability ratios.
1. Gross Profit Margin: Arista Networks has maintained a high gross profit margin ranging from 61.07% to 63.80%. This indicates that the company is effectively managing its production and distribution costs to generate a significant percentage of sales revenue as gross profit.
2. Operating Profit Margin: The operating profit margin has shown an improving trend, increasing from 30.19% in 2020 to 38.52% in 2023. This suggests that Arista Networks has been successful in controlling its operating expenses while increasing operating income.
3. Pretax Margin: Arista Networks has also exhibited growth in its pretax margin, with the margin expanding from 31.88% in 2020 to 41.33% in 2023. This indicates that the company has been efficient in managing not only its operating expenses but also interest and other non-operating costs.
4. Net Profit Margin: The net profit margin has shown some fluctuations but overall remained healthy, fluctuating between 27.38% and 35.62%. It is noteworthy that Arista Networks was able to achieve a high net profit margin despite economic challenges in certain years.
Overall, based on the profitability ratios analyzed, Arista Networks Inc has been able to maintain solid profitability levels, with improvements in operating profit margin and pretax margin indicating effective cost management and operational efficiency.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 22.69% | 22.54% | 16.13% | 14.76% | 19.25% |
| Return on assets (ROA) | 20.98% | 19.96% | 14.66% | 13.39% | 20.54% |
| Return on total capital | 31.27% | 31.26% | 23.24% | 21.07% | 27.84% |
| Return on equity (ROE) | 28.91% | 27.68% | 21.13% | 19.11% | 29.70% |
Arista Networks Inc has displayed strong profitability over the years as indicated by its profitability ratios. The Operating return on assets (Operating ROA) has been consistently high, showing an increasing trend from 19.25% in 2019 to 22.69% in 2023. This implies that the company is efficient in generating operating income from its assets.
Similarly, the Return on assets (ROA) has also shown a positive upward trajectory, peaking at 20.98% in 2023. This ratio reflects the company's ability to generate profits relative to its total assets, with Arista Networks Inc showing improvement in this metric over the years.
The Return on total capital has consistently exceeded 20%, reaching 31.27% in 2023, indicating that the company has been successful in generating returns for both equity and debt holders.
Lastly, the Return on equity (ROE) has displayed a strong performance, although it experienced a slight dip in 2021 before rebounding to 28.91% in 2023. This shows that Arista Networks Inc has been efficient in utilizing shareholders' equity to generate profits.
Overall, the profitability ratios of Arista Networks Inc reflect a financially robust company with a strong ability to generate profits from its operational activities and assets.