Arista Networks (ANET)
Return on total capital
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 2,257,249 | 2,086,254 | 1,900,906 | 1,733,697 | 1,527,106 | 1,323,975 | 1,139,922 | 996,434 | 924,739 | 853,589 | 808,690 | 756,314 | 699,684 | 681,035 | 740,415 | 794,074 | 851,087 | 874,249 | 816,536 | 354,596 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 7,219,060 | 6,505,560 | 5,857,580 | 5,329,170 | 4,885,820 | 4,385,220 | 4,005,790 | 4,153,180 | 3,978,600 | 3,865,260 | 3,697,840 | 3,451,340 | 3,320,290 | 3,083,880 | 3,036,480 | 2,848,830 | 2,894,690 | 2,656,000 | 2,525,560 | 2,400,370 |
| Return on total capital | 31.27% | 32.07% | 32.45% | 32.53% | 31.26% | 30.19% | 28.46% | 23.99% | 23.24% | 22.08% | 21.87% | 21.91% | 21.07% | 22.08% | 24.38% | 27.87% | 29.40% | 32.92% | 32.33% | 14.77% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $2,257,249K ÷ ($—K + $7,219,060K)
= 31.27%
Arista Networks Inc's return on total capital has shown a consistent upward trend over the past eight quarters, ranging from 23.99% in Q1 2022 to a peak of 32.53% in Q1 2023. The company's ability to generate returns on the total capital employed in its business has steadily improved, indicating efficient utilization of both equity and debt in generating profits.
The increasing trend in return on total capital demonstrates Arista Networks Inc's ability to generate higher profits relative to its total capital base. This suggests that the company is effectively managing its resources and investments to generate strong returns for its shareholders.
Overall, the consistent improvement in return on total capital reflects positively on Arista Networks Inc's operational efficiency and effectiveness in utilizing its capital resources to generate returns for its investors.
Peer comparison
Dec 31, 2023