Cisco Systems Financial Statements and Financial Ratios Analyzed

Cisco Systems Financial Statements and Financial Ratios Analyzed from 2015 to 2019

Expert Cisco Financial Report & Analysis by Paul Borosky, MBA.

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Hey All,

Thanks for visiting my Cisco Systems Financial Report page. On this page, you will be able to find preliminary information about Cisco current financial performance as well as some historical track records and trends. 

For a more detailed examination of Cisco financial performance, please check out the "Financial Report".  In this report, written by myself, Paul Borosky, MBA., Doctoral Candidate, and published author, you will find:

  • Summarized income statement for the last 5 years.
  • Summarized balance sheet for the last 5 years.
  • Summary analysis by myself of the important income statement, balance sheet, and financial ratio trends and other happenings.
  • Five years’ worth of over twenty common financial ratios presented with formulas, calculations, and analysis tips for each ratio.
  • Line by line description, explanation, and analysis tip for most financial statement line items and financial ratios.
  • Professional financial analysis tips are provided in each section to help YOU conduct your OWN financial analysis!
  • Each section includes an “in other words” segment.  This is where I use plain English to explain concepts.

Enjoy the preliminary information and for a more detailed analysis, buy the financial report!


Paul, MBA.

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Cisco Systems Financial Report by Paul Borosky, MBA.
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Financial Report Sample 2

Cisco Systems: Brief Summary

Cisco Systems (CSCO) headquarters is located in San Jose, California.  The organization competes in the technology sector, specifically the communication equipment industry.  At present, Cisco employs approximately 76,000 employees.  Their main revenue generators would be the designing, manufacturing, and selling of Internet-based networking and other communication equipment.

From a financial perspective, Cisco Systems stock price ranges between $32.40 to $58.26 in the last 52 weeks.  The company does pay out dividends, approximately 3.16% yield.  Their market capitalization is $192.6 billion.  Finally, the organization beta is .96, which indicates that the company’s risk as compared to the overall market is slightly lower.

Cisco Systems Financial Report Sources

“Cisco 2019 Company Analysis… For Beginners: Financial Statements and Financial Ratios: Defined, Discussed, and Analyzed for 5 Years” was written by, Paul Borosky, MBA. and owner of Quality Business Plan.  In this report, I used Cisco 2018 10k, 2017 10k annual report, 2016 10k annual report, 2015 10k annual report, and 2019 10k annual report as the basis for information gathering. 


Section 1: Cisco Income Statement Analyzed 2015 to 2019

In this section, I walk through a broad definition as to what an income statement is and why it is important.  From this, I then discuss and define income statement line items, such as revenues, gross profits, etc. in detail.  After each line item is defined and discussed, I finally offer a summary analysis of Cisco important income statement line item trends from 2015 to 2019, in most cases.

Cisco Systems Revenue Growth.

In 2015, Cisco Systems revenues ended the year at $49.1 billion.  The company would slightly increase its revenues to $49.2 billion in 2016 only to fall in 2017 to $48 billion.  Fortunately, though the company did increase its revenues for the last two years ending 2019 at approximately $51.9 billion.  The anemic growth in the last five years should be worrisome for investors.  A main reason why is that the company competes in the technology sector.  To adequately compete, this requires continuous innovation, which it seems like Cisco is lacking.  If the trend in 2019 continues, then it may indicate that the firm has improved its competitive nature.  However, a fall in revenue in 2020 should indicate to investors that the organization has some cultural dysfunction that needs a deep cleaning.

Cisco Systems 2019 Income Statement

Column1 2019 2018 2017 2016 2015
Revenues                    51,904                    49,330                    48,005                    49,247                      49,161
COGS                    19,238                    18,724                    17,781                    18,287                      19,480
Gross Profit                    32,666                    30,606                    30,224                    30,960                      29,681
SG&A                      9,571                      9,242                      9,184                      9,619                        9,821
Depreciation                      1,897                      2,192                      2,286                      2,150                        2,442
R & D                      6,577                      6,332                      6,059                      6,296                        6,207
Operating Expenses                    18,447                    18,297                    18,251                    18,300                      18,911
EBIT                    14,219                    12,309                    11,973                    12,660                      10,770
Other Income
Interest Expense                         859                         943                         861                         676                           566
EBT                    14,571                    13,039                    12,287                    12,920                      11,201
Taxes                      2,950                    12,929                      2,678                      2,181                        2,220
Net Income                   11,621                        110                     9,609                   10,739                      8,981

Section 2: Cisco Balance Sheet Analyzed from 2015 to 2019

For Cisco Systems balance sheet, I again go through each important line item from the balance sheet.  In reviewing each line item, I will define their balance sheet line item, such as cash, property, plant and equipment, and liabilities between 2015 to 2019.  Next, I then offer a summary analysis of their important balance sheet line items.

Cisco Systems Short-term Investments

Cisco Systems ended 2015 with approximately $53.5 billion in short-term investments.  Their short-term investments would grow through 2017 ending the year with approximately 58.7 billion in short-term investments.  However, in the next two years, the organization's short-term investments would continuously fall ending 2019 with $21.6 billion in short-term investments.  As a concern, a significant fall in short-term investments may indicate that the company is burning cash and needs to supplement its operations with short-term investments.  However, the organization had increased its revenue substantially from 2018 to 2019.  If this revenue increases again in 2019, then this funding may have been utilized for research and development, which would be a good thing.  From an investor perspective, they should be looking real hard at 2020s financial statements for a better understanding of the companies trends in this area as well as revenues.

Cisco Systems 2019 Summary Balance Sheet

Column1 2019 2018 2017 2016 2015
Cash                      11,750                    8,934                  11,708                    7,631                    6,877
Short Term Investment                      21,663                  37,614                  58,784                  58,125                  53,539
Account Receivable                        5,491                    5,554                    5,146                    5,847                    5,344
Inventory                        1,383                    1,846                    1,616                    1,217                    1,627
Current Assets                    47,755                61,837                83,703                78,719                76,283
Net PPE                        2,789                    3,006                    3,322                    3,506                    3,332
Goodwill                      33,529                  31,706                  29,766                  26,625                  24,469
Total Assets                    97,793              108,784              129,818              121,652              113,481
Accounts Payable                        2,059                    1,904                    1,385                    1,056                    1,104
Accrued Expense                        3,221                    2,986                    2,895                    2,951                    3,049
Accrued Taxes                        1,149                    1,004                         98                       517                         62
Notes Payable                      10,191                    5,238                    7,992                    4,160                    3,897
LT Debt - Current
Total Current Liabilities                      31,712                  27,035                  27,583                  24,911                  23,623
LT Debt                      14,475                  20,331                  25,725                  24,483                  21,457
Total Liabilities                    64,222                65,580                63,681                58,067                53,774
Common Stock                      40,266                  42,820                  45,253                  44,516                  43,592
Retained Earnings                      (5,903)                    1,233                  20,838                  19,396                  16,045
Total Equity                    33,571                43,204                66,137                63,586                59,707
Total Equity & Liability                    97,793              108,784              129,818              121,652              113,481

Section 3: Cisco Financial Ratios Analyzed from 2015 to 2019

For this section, I have chosen several different financial ratios to review for Cisco from 2015 to 2019.  In reviewing each of their financial ratios, I first start with defining the financial ratio.  Next, I supply the financial formula for calculating the specific ratio.  Finally, I offer a brief analysis of their important Financial ratios. 

Cisco Systems Current Ratio.

Cisco Systems ended 2015 with a current ratio of 3.23.  The gold standard which indicates financial solvency for the next 12 months is 1.0.  This indicates that the company had three times as much current assets as needed to ensure solvency.  In my most humble of opinion, this indicates that the company’s executive team is mismanaging its current assets.  A better strategy would be to either increase dividends to reduce their current asset position or utilize current assets in a more long-term manner like purchasing additional property, plant, equipment to help lay the foundation for future growth.  Fortunately, in the next four years, the organization would take action to substantially reduce its current ratio position ending 2019 with the current ratio of 1.51.

Cisco Systems Total Asset Turnover.

Cisco Systems ended 2015 with a total asset turnover of .43.  In the next two years, their total asset turnover would fall 2.37 in 2017.  This indicates that the company is using its total assets in a less efficient manner to generate revenues year-over-year.  In my opinion, this is a direct reflection as to lacks a daisy attitude by the executive team.  Fortunately, the total asset turnover for Cisco would slightly improve over the next two years ended 2019 with .53.  If this trend continues, this may indicate that the company has taken action to improve the usage of assets as a whole.

Cisco Systems Return on Assets.

In 2015, Cisco Systems ended the year with a return on asset ratio of 7.9%.  In the next four years, their return on assets would fluctuate between .1% and 8.8%, ending 2019 with a return on assets of 11.88%.  As an investor, when a company’s return on assets are over the board, this should throw up some serious red flags.  Additional research needs to be done to determine why a significant fluctuation in this ratio has been done.  Unfortunately, there is no real clear answer.

Cisco Systems Debt ratio.

Cisco Systems ended 2015 with the debt ratio of 18.9%.  The company would increase its debt ratio to 20.1% in 2016.  Fortunately, though in the next three years, the company would continuously reduce its debt ratio ending 2019 at 14.8%.  Reducing their debt ratio also reduces the risk of bankruptcy and insolvency.  From this perspective, kudos to Cisco’s executive team.  However, this should also indicate to investors that Cisco is running out of ideas for investments.  If they had innovative ideas, then the organization, from my opinion, would be tapping into debt to fund the future growth.  There’s nothing better than making money on borrowed money.  Unfortunately, this is not the case.  A technology industry that is running out of ideas is worrisome.

Cisco Systems 2019 Liquidity Ratios

Ratios 2019 2018 2017 2016 2015
Current Ratio                           1.51                    2.29
Cash Ratio                           0.37                    0.33
Quick Ratio                           1.46                    2.22
Net Working Capital                       12,195                10,440

Cisco Systems 2019 Asset Utilization

Ratios 2019 2018 2017 2016 2015
Total Asset Turnover                           0.53                    0.45
Fixed Asset Turnover                         18.61                  16.41
Days Sales Outstanding                         38.61                  41.09
Inventory Turnover                         37.53                  26.72
Accounts Receivable Turnover                           9.45                    8.88
Working Capital Turnover                           4.26                    4.73
AP Turnover                         25.21                  25.91
Average Days Inventory                         26.24                  35.99
Average Days Payable                         39.07                  37.12
Cash Conversion Cycle                         25.79                  39.96

Cisco Systems 2019 Profitability Ratios

Ratios 2019 2018 2017 2016 2015
Return on Assets 11.88% 0.10%
Return on Equity 34.62% 0.25%
Net Profit Margin 22.39% 0.22%
Gross Profit Margin 62.94% 62.04%
Operating Profit Margin 27.39% 24.95%
Basic Earning Power 14.54% 11.32%
ROCE 21.52% 15.06%
Capital Employed                       66,081                81,749
ROIC 75.68% 0.77%

Cisco Systems 2019 Long-term Debt

Ratios 2019 2018 2017 2016 2015
Debt Ratio 14.80% 18.69%
Debt/Equity 43.12% 47.06%
Times Interest Earned                         16.55                  13.05