Stock Analysis on Net

Arista Networks Inc. (NYSE:ANET)

Analysis of Short-term (Operating) Activity Ratios

Microsoft Excel

Short-term Activity Ratios (Summary)

Arista Networks Inc., short-term (operating) activity ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Turnover Ratios
Inventory turnover 1.15 1.32 1.64 1.74 3.55
Receivables turnover 5.72 4.75 5.71 5.95 6.15
Payables turnover 5.13 7.33 5.27 6.23 9.41
Working capital turnover 0.90 1.03 0.80 0.76 0.84
Average No. Days
Average inventory processing period 318 276 222 210 103
Add: Average receivable collection period 64 77 64 61 59
Operating cycle 382 353 286 271 162
Less: Average payables payment period 71 50 69 59 39
Cash conversion cycle 311 303 217 212 123

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Arista Networks Inc. inventory turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Receivables turnover An activity ratio equal to revenue divided by receivables. Arista Networks Inc. receivables turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Arista Networks Inc. payables turnover ratio increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.
Working capital turnover An activity ratio calculated as revenue divided by working capital. Arista Networks Inc. working capital turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Arista Networks Inc. number of days of inventory outstanding deteriorated from 2021 to 2022 and from 2022 to 2023.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover.
Operating cycle Equal to average inventory processing period plus average receivables collection period. Arista Networks Inc. operating cycle deteriorated from 2021 to 2022 and from 2022 to 2023.
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Arista Networks Inc. number of days of payables outstanding decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Arista Networks Inc. cash conversion cycle deteriorated from 2021 to 2022 and from 2022 to 2023.

Inventory Turnover

Arista Networks Inc., inventory turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Cost of revenue 2,229,887 1,705,614 1,067,258 835,626 866,368
Inventories 1,945,180 1,289,706 650,117 479,668 243,825
Short-term Activity Ratio
Inventory turnover1 1.15 1.32 1.64 1.74 3.55
Benchmarks
Inventory Turnover, Competitors2
Apple Inc. 33.82 45.20 32.37 41.75 39.40
Cisco Systems Inc. 5.83 7.52 11.50 13.74 13.91
Super Micro Computer Inc. 4.04 2.84 2.90 3.30 4.48
Inventory Turnover, Sector
Technology Hardware & Equipment 18.21 24.06 23.91 28.59 28.88
Inventory Turnover, Industry
Information Technology 7.40 8.17 9.78 10.43 10.62

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Inventory turnover = Cost of revenue ÷ Inventories
= 2,229,887 ÷ 1,945,180 = 1.15

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Arista Networks Inc. inventory turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Receivables Turnover

Arista Networks Inc., receivables turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Revenue 5,860,168 4,381,310 2,948,037 2,317,512 2,410,706
Accounts receivable, net 1,024,569 923,096 516,509 389,540 391,987
Short-term Activity Ratio
Receivables turnover1 5.72 4.75 5.71 5.95 6.15
Benchmarks
Receivables Turnover, Competitors2
Apple Inc. 12.99 13.99 13.92 17.03 11.35
Cisco Systems Inc. 9.74 7.79 8.64 9.01 9.45
Super Micro Computer Inc. 6.20 6.23 7.67 8.27 8.89
Receivables Turnover, Sector
Technology Hardware & Equipment 12.08 12.46 12.78 14.72 10.89
Receivables Turnover, Industry
Information Technology 7.37 7.42 7.55 8.00 7.59

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Receivables turnover = Revenue ÷ Accounts receivable, net
= 5,860,168 ÷ 1,024,569 = 5.72

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. Arista Networks Inc. receivables turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Payables Turnover

Arista Networks Inc., payables turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Cost of revenue 2,229,887 1,705,614 1,067,258 835,626 866,368
Accounts payable 435,059 232,572 202,636 134,235 92,105
Short-term Activity Ratio
Payables turnover1 5.13 7.33 5.27 6.23 9.41
Benchmarks
Payables Turnover, Competitors2
Apple Inc. 3.42 3.49 3.89 4.01 3.50
Cisco Systems Inc. 9.19 8.47 7.59 7.94 9.34
Super Micro Computer Inc. 7.52 6.71 4.94 6.74 8.34
Payables Turnover, Sector
Technology Hardware & Equipment 3.68 3.70 4.06 4.23 3.79
Payables Turnover, Industry
Information Technology 4.87 4.54 4.99 5.35 5.27

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Payables turnover = Cost of revenue ÷ Accounts payable
= 2,229,887 ÷ 435,059 = 5.13

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Arista Networks Inc. payables turnover ratio increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Working Capital Turnover

Arista Networks Inc., working capital turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Current assets 8,390,235 5,550,748 4,812,676 3,836,998 3,471,636
Less: Current liabilities 1,909,606 1,293,531 1,109,829 768,243 597,074
Working capital 6,480,629 4,257,217 3,702,847 3,068,755 2,874,562
 
Revenue 5,860,168 4,381,310 2,948,037 2,317,512 2,410,706
Short-term Activity Ratio
Working capital turnover1 0.90 1.03 0.80 0.76 0.84
Benchmarks
Working Capital Turnover, Competitors2
Apple Inc. 39.10 7.16 4.56
Cisco Systems Inc. 4.73 4.65 3.88 2.70 3.24
Super Micro Computer Inc. 3.95 3.89 3.96 3.77 4.29
Working Capital Turnover, Sector
Technology Hardware & Equipment 24.39 15.74 5.44 4.14
Working Capital Turnover, Industry
Information Technology 5.24 5.71 3.86 2.86 3.06

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Working capital turnover = Revenue ÷ Working capital
= 5,860,168 ÷ 6,480,629 = 0.90

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital. Arista Networks Inc. working capital turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Average Inventory Processing Period

Arista Networks Inc., average inventory processing period calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data
Inventory turnover 1.15 1.32 1.64 1.74 3.55
Short-term Activity Ratio (no. days)
Average inventory processing period1 318 276 222 210 103
Benchmarks (no. days)
Average Inventory Processing Period, Competitors2
Apple Inc. 11 8 11 9 9
Cisco Systems Inc. 63 49 32 27 26
Super Micro Computer Inc. 90 128 126 110 81
Average Inventory Processing Period, Sector
Technology Hardware & Equipment 20 15 15 13 13
Average Inventory Processing Period, Industry
Information Technology 49 45 37 35 34

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 1.15 = 318

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Arista Networks Inc. number of days of inventory outstanding deteriorated from 2021 to 2022 and from 2022 to 2023.

Average Receivable Collection Period

Arista Networks Inc., average receivable collection period calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data
Receivables turnover 5.72 4.75 5.71 5.95 6.15
Short-term Activity Ratio (no. days)
Average receivable collection period1 64 77 64 61 59
Benchmarks (no. days)
Average Receivable Collection Period, Competitors2
Apple Inc. 28 26 26 21 32
Cisco Systems Inc. 37 47 42 41 39
Super Micro Computer Inc. 59 59 48 44 41
Average Receivable Collection Period, Sector
Technology Hardware & Equipment 30 29 29 25 34
Average Receivable Collection Period, Industry
Information Technology 50 49 48 46 48

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 5.72 = 64

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover.

Operating Cycle

Arista Networks Inc., operating cycle calculation, comparison to benchmarks

No. days

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data
Average inventory processing period 318 276 222 210 103
Average receivable collection period 64 77 64 61 59
Short-term Activity Ratio
Operating cycle1 382 353 286 271 162
Benchmarks
Operating Cycle, Competitors2
Apple Inc. 39 34 37 30 41
Cisco Systems Inc. 100 96 74 68 65
Super Micro Computer Inc. 149 187 174 154 122
Operating Cycle, Sector
Technology Hardware & Equipment 50 44 44 38 47
Operating Cycle, Industry
Information Technology 99 94 85 81 82

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 318 + 64 = 382

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. Arista Networks Inc. operating cycle deteriorated from 2021 to 2022 and from 2022 to 2023.

Average Payables Payment Period

Arista Networks Inc., average payables payment period calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data
Payables turnover 5.13 7.33 5.27 6.23 9.41
Short-term Activity Ratio (no. days)
Average payables payment period1 71 50 69 59 39
Benchmarks (no. days)
Average Payables Payment Period, Competitors2
Apple Inc. 107 105 94 91 104
Cisco Systems Inc. 40 43 48 46 39
Super Micro Computer Inc. 49 54 74 54 44
Average Payables Payment Period, Sector
Technology Hardware & Equipment 99 99 90 86 96
Average Payables Payment Period, Industry
Information Technology 75 80 73 68 69

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 5.13 = 71

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Arista Networks Inc. number of days of payables outstanding decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Cash Conversion Cycle

Arista Networks Inc., cash conversion cycle calculation, comparison to benchmarks

No. days

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data
Average inventory processing period 318 276 222 210 103
Average receivable collection period 64 77 64 61 59
Average payables payment period 71 50 69 59 39
Short-term Activity Ratio
Cash conversion cycle1 311 303 217 212 123
Benchmarks
Cash Conversion Cycle, Competitors2
Apple Inc. -68 -71 -57 -61 -63
Cisco Systems Inc. 60 53 26 22 26
Super Micro Computer Inc. 100 133 100 100 78
Cash Conversion Cycle, Sector
Technology Hardware & Equipment -49 -55 -46 -48 -49
Cash Conversion Cycle, Industry
Information Technology 24 14 12 13 13

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 318 + 6471 = 311

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Arista Networks Inc. cash conversion cycle deteriorated from 2021 to 2022 and from 2022 to 2023.