Arista Networks (ANET)

Interest coverage

		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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	2,944,616	2,784,878	2,602,323	2,432,812	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
Interest expense (ttm)	US$ in thousands	0	12,146	12,146	12,146	24,292	25,930	32,859	37,286	27,568	15,446	10,153	7,598	7,215	8,043	10,726	17,522	27,139	24,649	20,330	11,662
Interest coverage		—	229.28	214.25	200.30	92.92	80.46	57.85	46.50	55.39	85.72	112.27	131.14	128.17	106.13	75.40	43.16	25.78	27.63	36.42	68.09

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $2,944,616K ÷ $0K
= —

The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. Looking at the data provided for Arista Networks, we can observe fluctuations in its interest coverage ratio over the quarters.

From March 31, 2020, to December 31, 2021, the interest coverage ratio shows a decreasing trend, indicating a decline in the company's ability to cover its interest expenses with its operating income. However, from March 31, 2022, onwards, the interest coverage ratio demonstrates a significant improvement, reaching a peak of 229.28 as of September 30, 2024.

The significant increase in the interest coverage ratio after March 31, 2022, suggests that Arista Networks has enhanced its ability to meet its interest obligations from its operating income. This improvement could be attributed to various factors such as increased operating income, better cost management, or refinancing of debt at lower interest rates.

Overall, the trend in Arista Networks' interest coverage ratio indicates a positive development in the company's financial health and its ability to handle its interest payments effectively in recent quarters.