Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Arista Networks Inc., profitability ratios
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).
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Arista Networks Inc. gross profit margin ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Arista Networks Inc. operating profit margin ratio improved from 2021 to 2022 and from 2022 to 2023. |
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Arista Networks Inc. net profit margin ratio improved from 2021 to 2022 and from 2022 to 2023. |
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Arista Networks Inc. ROE improved from 2021 to 2022 and from 2022 to 2023. |
| ROA | A profitability ratio calculated as net income divided by total assets. | Arista Networks Inc. ROA improved from 2021 to 2022 and from 2022 to 2023. |
Gross Profit Margin
Arista Networks Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Gross profit | 3,630,281) | 2,675,696) | 1,880,779) | 1,481,886) | 1,544,338) | |
| Revenue | 5,860,168) | 4,381,310) | 2,948,037) | 2,317,512) | 2,410,706) | |
| Profitability Ratio | ||||||
| Gross profit margin1 | 61.95% | 61.07% | 63.80% | 63.94% | 64.06% | |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Apple Inc. | 44.13% | 43.31% | 41.78% | 38.23% | 37.82% | |
| Cisco Systems Inc. | 62.73% | 62.55% | 64.02% | 64.26% | 62.94% | |
| Super Micro Computer Inc. | 18.01% | 15.40% | 15.03% | 15.76% | 14.16% | |
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
Gross profit margin = 100 × Gross profit ÷ Revenue
= 100 × 3,630,281 ÷ 5,860,168 = 61.95%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Arista Networks Inc. gross profit margin ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
Operating Profit Margin
Arista Networks Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Income from operations | 2,257,249) | 1,527,106) | 924,739) | 699,684) | 805,774) | |
| Revenue | 5,860,168) | 4,381,310) | 2,948,037) | 2,317,512) | 2,410,706) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 38.52% | 34.86% | 31.37% | 30.19% | 33.42% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Apple Inc. | 29.82% | 30.29% | 29.78% | 24.15% | 24.57% | |
| Cisco Systems Inc. | 26.37% | 27.09% | 25.76% | 27.63% | 27.39% | |
| Super Micro Computer Inc. | 10.68% | 6.45% | 3.48% | 2.57% | 2.78% | |
| Operating Profit Margin, Sector | ||||||
| Technology Hardware & Equipment | 29.20% | 29.70% | 29.10% | 24.49% | 24.86% | |
| Operating Profit Margin, Industry | ||||||
| Information Technology | 26.32% | 28.47% | 28.76% | 24.95% | 25.42% | |
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 profit margin = 100 × Income from operations ÷ Revenue
= 100 × 2,257,249 ÷ 5,860,168 = 38.52%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Arista Networks Inc. operating profit margin ratio improved from 2021 to 2022 and from 2022 to 2023. |
Net Profit Margin
Arista Networks Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income | 2,087,321) | 1,352,446) | 840,854) | 634,557) | 859,867) | |
| Revenue | 5,860,168) | 4,381,310) | 2,948,037) | 2,317,512) | 2,410,706) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 35.62% | 30.87% | 28.52% | 27.38% | 35.67% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Apple Inc. | 25.31% | 25.31% | 25.88% | 20.91% | 21.24% | |
| Cisco Systems Inc. | 22.13% | 22.91% | 21.26% | 22.75% | 22.39% | |
| Super Micro Computer Inc. | 8.98% | 5.49% | 3.14% | 2.52% | 2.05% | |
| Net Profit Margin, Sector | ||||||
| Technology Hardware & Equipment | 24.78% | 24.87% | 25.16% | 21.05% | 21.32% | |
| Net Profit Margin, Industry | ||||||
| Information Technology | 22.13% | 24.07% | 25.56% | 21.38% | 22.17% | |
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
Net profit margin = 100 × Net income ÷ Revenue
= 100 × 2,087,321 ÷ 5,860,168 = 35.62%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Arista Networks Inc. net profit margin ratio improved from 2021 to 2022 and from 2022 to 2023. |
Return on Equity (ROE)
Arista Networks Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income | 2,087,321) | 1,352,446) | 840,854) | 634,557) | 859,867) | |
| Stockholders’ equity | 7,219,059) | 4,885,820) | 3,978,600) | 3,320,291) | 2,894,686) | |
| Profitability Ratio | ||||||
| ROE1 | 28.91% | 27.68% | 21.13% | 19.11% | 29.71% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Apple Inc. | 156.08% | 196.96% | 150.07% | 87.87% | 61.06% | |
| Cisco Systems Inc. | 28.44% | 29.70% | 25.66% | 29.57% | 34.62% | |
| Super Micro Computer Inc. | 32.45% | 20.00% | 10.20% | 7.91% | 7.64% | |
| ROE, Sector | ||||||
| Technology Hardware & Equipment | 97.10% | 117.05% | 97.06% | 64.42% | 53.02% | |
| ROE, Industry | ||||||
| Information Technology | 31.93% | 38.69% | 42.56% | 35.29% | 36.68% | |
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
ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 2,087,321 ÷ 7,219,059 = 28.91%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Arista Networks Inc. ROE improved from 2021 to 2022 and from 2022 to 2023. |
Return on Assets (ROA)
Arista Networks Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income | 2,087,321) | 1,352,446) | 840,854) | 634,557) | 859,867) | |
| Total assets | 9,946,806) | 6,775,410) | 5,734,429) | 4,738,919) | 4,185,290) | |
| Profitability Ratio | ||||||
| ROA1 | 20.98% | 19.96% | 14.66% | 13.39% | 20.54% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Apple Inc. | 27.51% | 28.29% | 26.97% | 17.73% | 16.32% | |
| Cisco Systems Inc. | 12.38% | 12.57% | 10.86% | 11.82% | 11.88% | |
| Super Micro Computer Inc. | 17.42% | 8.90% | 4.99% | 4.39% | 4.27% | |
| ROA, Sector | ||||||
| Technology Hardware & Equipment | 24.00% | 24.80% | 23.27% | 16.30% | 15.34% | |
| ROA, Industry | ||||||
| Information Technology | 13.10% | 15.14% | 15.65% | 12.15% | 12.80% | |
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
ROA = 100 × Net income ÷ Total assets
= 100 × 2,087,321 ÷ 9,946,806 = 20.98%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| ROA | A profitability ratio calculated as net income divided by total assets. | Arista Networks Inc. ROA improved from 2021 to 2022 and from 2022 to 2023. |