Analysis of Short-term (Operating) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Short-term Activity Ratios (Summary)
Arista Networks Inc., short-term (operating) activity 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).
| 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
| 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 | 7.30 | 8.07 | 9.69 | 10.29 | 10.44 | |
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
| 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 | 7.41 | 7.44 | 7.57 | 8.02 | 7.60 | |
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
| 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 | 4.86 | 4.53 | 4.99 | 5.34 | 5.26 | |
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
| 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 | 5.23 | 5.68 | 3.87 | 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
| 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 | 50 | 45 | 38 | 35 | 35 | |
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
| 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 | 49 | 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
| 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 | 86 | 81 | 83 | |
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
| 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 | 81 | 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
| 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 | 13 | 13 | 13 | 14 | |
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 + 64 – 71 = 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. |