Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
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Liquidity Ratios (Summary)
Arista Networks Inc., liquidity ratios
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Current ratio | ||||||
| Quick ratio | ||||||
| Cash ratio |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The liquidity position, as indicated by the presented ratios, demonstrates a generally strong, though evolving, profile over the five-year period. Initial values are robust, but a subtle shift towards a more conservative liquidity stance is apparent in the later years.
- Current Ratio
- The current ratio exhibits relative stability between 2021 and 2023, fluctuating within a narrow range of 4.29 to 4.39. A noticeable decrease is observed in 2025, falling to 3.05. This suggests a potential reduction in the proportion of current assets covering current liabilities by the end of the period.
- Quick Ratio
- The quick ratio follows a similar pattern to the current ratio, beginning at 3.54 in 2021 and remaining relatively stable through 2024 at approximately 3.05 to 3.46. A decline is then observed in 2025, with the ratio decreasing to 2.35. This indicates a diminishing ability to meet short-term obligations with the most liquid assets, excluding inventory.
- Cash Ratio
- The cash ratio demonstrates fluctuations throughout the period. It decreases from 3.07 in 2021 to 2.34 in 2022, then recovers to 3.04 in 2024 before declining again to 2.00 in 2025. This suggests variability in the company’s reliance on readily available cash to cover immediate liabilities. The 2025 value represents the lowest point within the observed timeframe.
Overall, the trend suggests a gradual decrease in all three liquidity ratios, particularly pronounced in 2025. While the ratios remain above 2.0 for all years, the downward trajectory warrants further investigation to understand the underlying drivers and potential implications for short-term financial flexibility.
Current Ratio
Arista Networks Inc., current ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Current ratio1 | ||||||
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Apple Inc. | ||||||
| Cisco Systems Inc. | ||||||
| Dell Technologies Inc. | ||||||
| Super Micro Computer Inc. | ||||||
| Current Ratio, Sector | ||||||
| Technology Hardware & Equipment | ||||||
| Current Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
The current ratio exhibits a generally stable pattern from 2021 through 2024, followed by a notable decrease in 2025. Throughout the initial period, the ratio remains consistently above 4.0, indicating a strong ability to cover short-term obligations with short-term assets. The subsequent decline in 2025 warrants further investigation.
- Current Ratio Trend (2021-2024)
- From December 31, 2021, to December 31, 2024, the current ratio fluctuated within a narrow range, beginning at 4.34 and ending at 4.36. This suggests a consistent liquidity position over these four years. While there were minor variations, the overall trend is one of stability.
- Current Ratio Change (2025)
- A significant decrease in the current ratio is observed in 2025, falling to 3.05. This represents the lowest value within the observed period and indicates a reduced capacity to meet short-term liabilities with current assets. The decrease suggests either a substantial increase in current liabilities, a decrease in current assets, or a combination of both.
- Underlying Component Analysis
- The stability of the current ratio from 2021-2024 is supported by concurrent increases in both current assets and current liabilities. However, the 2025 decline is likely driven by a disproportionately larger increase in current liabilities compared to current assets. Further analysis of the individual components is necessary to determine the specific factors contributing to this change.
- Implications
- The sustained ratio above 4.0 from 2021-2024 suggests a conservative liquidity management approach. The drop to 3.05 in 2025, while still above 1.0, signals a potential weakening in the short-term financial position and may necessitate a review of working capital management strategies.
Quick Ratio
Arista Networks Inc., quick ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | ||||||
| Marketable securities | ||||||
| Accounts receivable, net | ||||||
| Total quick assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Quick ratio1 | ||||||
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Apple Inc. | ||||||
| Cisco Systems Inc. | ||||||
| Dell Technologies Inc. | ||||||
| Super Micro Computer Inc. | ||||||
| Quick Ratio, Sector | ||||||
| Technology Hardware & Equipment | ||||||
| Quick Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
The quick ratio exhibited fluctuating behavior over the five-year period. Initially, the ratio decreased before stabilizing and then declining again in the most recent year presented.
- Overall Trend
- The quick ratio began at 3.54 in 2021, decreased to 3.05 in 2022, and then increased to 3.16 in 2023. A further increase to 3.46 was observed in 2024, followed by a notable decrease to 2.35 in 2025.
- Quick Asset Evolution
- Total quick assets demonstrated a consistent upward trend throughout the period, increasing from US$3,924,824 thousand in 2021 to US$12,629,900 thousand in 2025. This indicates a growing capacity to meet short-term obligations with highly liquid assets.
- Liability Changes
- Current liabilities also increased over the period, rising from US$1,109,829 thousand in 2021 to US$5,376,500 thousand in 2025. The rate of increase in current liabilities accelerated in later years, particularly between 2023 and 2025.
- Ratio Dynamics
- The initial decrease in the quick ratio from 2021 to 2022 was likely driven by a faster growth rate in current liabilities compared to quick assets. The subsequent increases in the ratio through 2024 suggest that quick assets were growing at a faster pace than current liabilities. However, the significant decline in 2025, despite continued growth in quick assets, indicates a substantial and rapid increase in current liabilities that outpaced the growth of liquid assets.
The observed fluctuations suggest a changing dynamic between the company’s most liquid assets and its short-term obligations. While the company consistently maintained a quick ratio above 1.0, indicating sufficient liquid assets to cover immediate liabilities, the recent decline warrants further investigation into the drivers of the increased current liabilities.
Cash Ratio
Arista Networks Inc., cash ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cash and cash equivalents | ||||||
| Marketable securities | ||||||
| Total cash assets | ||||||
| Current liabilities | ||||||
| Liquidity Ratio | ||||||
| Cash ratio1 | ||||||
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Apple Inc. | ||||||
| Cisco Systems Inc. | ||||||
| Dell Technologies Inc. | ||||||
| Super Micro Computer Inc. | ||||||
| Cash Ratio, Sector | ||||||
| Technology Hardware & Equipment | ||||||
| Cash Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
The cash ratio exhibited fluctuations over the five-year period. Initially, the ratio decreased before stabilizing and then declining again. Total cash assets and current liabilities both increased throughout the period, but at differing rates, influencing the ratio’s movement.
- Cash Ratio Trend
- The cash ratio began at 3.07 in 2021, indicating the company held $3.07 of cash for every $1 of current liabilities. A decrease was observed in 2022, with the ratio falling to 2.34. The ratio experienced a modest recovery in 2023, reaching 2.62. Further improvement occurred in 2024, with the ratio rising to 3.04, before decreasing to 2.00 in 2025.
- Total Cash Assets
- Total cash assets demonstrated an overall upward trend. A decrease was noted between 2021 and 2022, from $3,408,315 thousand to $3,023,729 thousand. However, subsequent years showed substantial increases, reaching $5,007,968 thousand in 2023, $8,303,473 thousand in 2024, and $10,743,000 thousand in 2025.
- Current Liabilities
- Current liabilities consistently increased throughout the period. From $1,109,829 thousand in 2021, they rose to $1,293,531 thousand in 2022, $1,909,606 thousand in 2023, $2,732,222 thousand in 2024, and $5,376,500 thousand in 2025. The rate of increase in current liabilities accelerated in the later years of the period.
The decline in the cash ratio in 2025, despite the continued growth in total cash assets, suggests that current liabilities grew at a faster pace than cash holdings during that year. This indicates a potential shift in the company’s short-term financial structure, requiring further investigation into the composition of current liabilities and the reasons for their increased growth rate.