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Cisco Systems (NAS:CSCO) Operating Income

: $14,115 Mil (TTM As of Jan. 2023)
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Cisco Systems's Operating Income for the three months ended in Jan. 2023 was $3,535 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Jan. 2023 was $14,115 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Cisco Systems's Operating Income for the three months ended in Jan. 2023 was $3,535 Mil. Cisco Systems's Revenue for the three months ended in Jan. 2023 was $13,592 Mil. Therefore, Cisco Systems's Operating Margin % for the quarter that ended in Jan. 2023 was 26.01%.

Good Sign:

Cisco Systems Inc operating margin is expanding. Margin expansion is usually a good sign.

Cisco Systems's 5-Year average Growth Rate for Operating Margin % was 1.00% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Cisco Systems's annualized ROC % for the quarter that ended in Jan. 2023 was 14.47%. Cisco Systems's annualized ROC (Joel Greenblatt) % for the quarter that ended in Jan. 2023 was 715.85%.


Cisco Systems Operating Income Historical Data

The historical data trend for Cisco Systems's Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Cisco Systems Annual Data
Trend Jul13 Jul14 Jul15 Jul16 Jul17 Jul18 Jul19 Jul20 Jul21 Jul22
Operating Income
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 12,667.00 14,541.00 14,101.00 13,719.00 13,975.00

Cisco Systems Quarterly Data
Apr18 Jul18 Oct18 Jan19 Apr19 Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22 Oct22 Jan23
Operating Income Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 3,490.00 3,610.00 3,432.00 3,538.00 3,535.00

Cisco Systems Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Jan. 2023 adds up the quarterly data reported by the company within the most recent 12 months, which was $14,115 Mil.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Cisco Systems  (NAS:CSCO) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

Cisco Systems's annualized ROC % for the quarter that ended in Jan. 2023 is calculated as:

ROC % (Q: Jan. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Oct. 2022 ) + Invested Capital (Q: Jan. 2023 ))/ count )
=14140 * ( 1 - 18.8% )/( (78603 + 80048)/ 2 )
=11481.68/79325.5
=14.47 %

where

Note: The Operating Income data used here is four times the quarterly (Jan. 2023) data.

2. Joel Greenblatt's definition of Return on Capital:

Cisco Systems's annualized ROC (Joel Greenblatt) % for the quarter that ended in Jan. 2023 is calculated as:

ROC (Joel Greenblatt) %(Q: Jan. 2023 )
=EBIT/Average of (Net fixed Assets + Net Working Capital)
=EBIT/Average of (Property, Plant and Equipment+Net Working Capital)
     Q: Oct. 2022  Q: Jan. 2023
=EBIT/( ( (Property, Plant and Equipment + Net Working Capital) + (Property, Plant and Equipment + Net Working Capital) )/ count )
=14088/( ( (1972 + max(-10973, 0)) + (1964 + max(-13105, 0)) )/ 2 )
=14088/( ( 1972 + 1964 )/ 2 )
=14088/1968
=715.85 %

where Working Capital is:

Working Capital(Q: Oct. 2022 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(5439 + 2664 + 4571) - (3206 + 12578 + 7863)
=-10973

Working Capital(Q: Jan. 2023 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(5237 + 3140 + 4520) - (4529 + 13109 + 8364)
=-13105

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Jan. 2023) EBIT data.

3. Operating Income is also linked to Operating Margin %:

Cisco Systems's Operating Margin % for the quarter that ended in Jan. 2023 is calculated as:

Operating Margin %=Operating Income (Q: Jan. 2023 )/Revenue (Q: Jan. 2023 )
=3535/13592
=26.01 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.


Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.


Cisco Systems Operating Income Related Terms

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Cisco Systems (NAS:CSCO) Business Description

Cisco Systems logo
Address
170 West Tasman Drive, San Jose, CA, USA, 95134-1706
Cisco Systems is the largest provider of networking equipment in the world and one of the largest software companies in the world. Its largest businesses are selling networking hardware and software (where it has leading market shares) and cybersecurity software like firewalls. It also has collaboration products, like its Webex suite, and observability tools. It primarily outsources its manufacturing to third parties and has a large sales and marketing staff—25,000 strong across 90 countries. Overall, Cisco employees 80,000 employees and sells its products globally.
Executives
Sarah Rae Murphy director C/O CISCO SYSTEMS, INC., 170 WEST TASMAN DRIVE, SAN JOSE CA 95134
Jeffery S. Sharritts officer: EVP & Chief Cust & Prtnr Offcr 1200 ABERNATHY RD., NE, STE 1200, ATLANTA GA 30328
Deborah L Stahlkopf officer: EVP and Chief Legal Officer C/O CISCO SYSTEMS, INC., 170 WEST TASMAN DRIVE, SAN JOSE CA 95134
Marianna Tessel director C/O INTUIT INC., 2700 COAST AVENUE, MOUNTAIN VIEW CA 94043
John D Harris director C/O FLEXTRONICS INTERNATIONAL USA, INC., 6201 AMERICA CENTER DRIVE, SAN JOSE CA 95002
Richard Scott Herren officer: EVP and CFO 851 WEST CYPRESS CREEK ROAD, FORT LAUDERDALE FL 33309
Wesley G Bush director 333 MAPLE AVENUE EAST, #3080, VIENNA VA 22180
Lisa T Su director C/O ADVANCED MICRO DEVICES, INC., 2485 AUGUSTINE DRIVE, SANTA CLARA CA 95054
Carol B Tome director 55 GLENLAKE PARKWAY, NE, ATLANTA GA 30328
Geraldine Elliott officer: EVP, Chief Sales & Mktg Offcr 1194 N. MATHILDA AVE., SUNNYVALE CA 94089
Maria Martinez officer: EVP, Chief Customer Exp Offcr THE LANDMARK @ 1 MARKET STREET, SUITE 300, SAN FRANCISCO CA 94105
Mark Garrett director 106 EAST BABCOCK STREET SUITE 3A, BOZEMAN MT 59715
Irving Tan officer: SVP, Operations and Digital 170 WEST TASMAN DRIVE, SAN JOSE CA 95134
David Goeckeler officer: EVP, Networking and Security C/O WESTERN DIGITAL CORPORATION, 5601 GREAT OAKS PARKWAY, SAN JOSE CA 95119
Brent L Saunders director 2000 GALLOPING HILL ROAD, C/O SCHERING PLOUGH CORP, KENILWORTH NJ 07033

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