Stock Analysis on Net
Stock Analysis on Net

Arista Networks Inc. (NYSE:ANET)

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin 
Quarterly Data

Microsoft Excel

Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.

Two-Component Disaggregation of ROE

Arista Networks Inc., decomposition of ROE (quarterly data)

Microsoft Excel
ROE = ROA × Financial Leverage
Sep 30, 2024 28.82% = 20.74% × 1.39
Jun 30, 2024 29.20% = 21.18% × 1.38
Mar 31, 2024 29.11% = 21.69% × 1.34
Dec 31, 2023 28.91% = 20.98% × 1.38
Sep 30, 2023 29.22% = 20.96% × 1.39
Jun 30, 2023 29.18% = 20.88% × 1.40
Mar 31, 2023 28.46% = 20.11% × 1.42
Dec 31, 2022 27.68% = 19.96% × 1.39
Sep 30, 2022 26.56% = 18.90% × 1.41
Jun 30, 2022 25.84% = 17.77% × 1.45
Mar 31, 2022 22.46% = 15.27% × 1.47
Dec 31, 2021 21.13% = 14.66% × 1.44
Sep 30, 2021 20.30% = 14.43% × 1.41
Jun 30, 2021 19.70% = 13.99% × 1.41
Mar 31, 2021 19.60% = 13.82% × 1.42
Dec 31, 2020 19.11% = 13.39% × 1.43
Sep 30, 2020 23.10% = 16.19% × 1.43
Jun 30, 2020 24.79% = 17.36% × 1.43
Mar 31, 2020 27.99% = 19.39% × 1.44
Dec 31, 2019 29.71% = 20.54% × 1.45
Sep 30, 2019 — = — × 1.36
Jun 30, 2019 — = — × 1.36
Mar 31, 2019 — = — × 1.39

Based on: 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).

The primary reason for the decrease in return on equity ratio (ROE) over Q3 2024 is the decrease in profitability measured by return on assets ratio (ROA).

Three-Component Disaggregation of ROE

Arista Networks Inc., decomposition of ROE (quarterly data)

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Sep 30, 2024 28.82% = 40.29% × 0.51 × 1.39
Jun 30, 2024 29.20% = 39.01% × 0.54 × 1.38
Mar 31, 2024 29.11% = 37.64% × 0.58 × 1.34
Dec 31, 2023 28.91% = 35.62% × 0.59 × 1.38
Sep 30, 2023 29.22% = 33.97% × 0.62 × 1.39
Jun 30, 2023 29.18% = 32.48% × 0.64 × 1.40
Mar 31, 2023 28.46% = 31.24% × 0.64 × 1.42
Dec 31, 2022 27.68% = 30.87% × 0.65 × 1.39
Sep 30, 2022 26.56% = 29.63% × 0.64 × 1.41
Jun 30, 2022 25.84% = 29.55% × 0.60 × 1.45
Mar 31, 2022 22.46% = 29.54% × 0.52 × 1.47
Dec 31, 2021 21.13% = 28.52% × 0.51 × 1.44
Sep 30, 2021 20.30% = 28.30% × 0.51 × 1.41
Jun 30, 2021 19.70% = 27.72% × 0.50 × 1.41
Mar 31, 2021 19.60% = 27.48% × 0.50 × 1.42
Dec 31, 2020 19.11% = 27.38% × 0.49 × 1.43
Sep 30, 2020 23.10% = 32.06% × 0.50 × 1.43
Jun 30, 2020 24.79% = 33.16% × 0.52 × 1.43
Mar 31, 2020 27.99% = 34.10% × 0.57 × 1.44
Dec 31, 2019 29.71% = 35.67% × 0.58 × 1.45
Sep 30, 2019 — = — × — × 1.36
Jun 30, 2019 — = — × — × 1.36
Mar 31, 2019 — = — × — × 1.39

Based on: 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).

The primary reason for the decrease in return on equity ratio (ROE) over Q3 2024 is the decrease in efficiency measured by asset turnover ratio.

Two-Component Disaggregation of ROA

Arista Networks Inc., decomposition of ROA (quarterly data)

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Sep 30, 2024 20.74% = 40.29% × 0.51
Jun 30, 2024 21.18% = 39.01% × 0.54
Mar 31, 2024 21.69% = 37.64% × 0.58
Dec 31, 2023 20.98% = 35.62% × 0.59
Sep 30, 2023 20.96% = 33.97% × 0.62
Jun 30, 2023 20.88% = 32.48% × 0.64
Mar 31, 2023 20.11% = 31.24% × 0.64
Dec 31, 2022 19.96% = 30.87% × 0.65
Sep 30, 2022 18.90% = 29.63% × 0.64
Jun 30, 2022 17.77% = 29.55% × 0.60
Mar 31, 2022 15.27% = 29.54% × 0.52
Dec 31, 2021 14.66% = 28.52% × 0.51
Sep 30, 2021 14.43% = 28.30% × 0.51
Jun 30, 2021 13.99% = 27.72% × 0.50
Mar 31, 2021 13.82% = 27.48% × 0.50
Dec 31, 2020 13.39% = 27.38% × 0.49
Sep 30, 2020 16.19% = 32.06% × 0.50
Jun 30, 2020 17.36% = 33.16% × 0.52
Mar 31, 2020 19.39% = 34.10% × 0.57
Dec 31, 2019 20.54% = 35.67% × 0.58
Sep 30, 2019 — = — × —
Jun 30, 2019 — = — × —
Mar 31, 2019 — = — × —

Based on: 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).

The primary reason for the decrease in return on assets ratio (ROA) over Q3 2024 is the decrease in asset turnover ratio.