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Cisco Systems (Cisco Systems) Financial Strength : 6 (As of Apr. 2024)


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What is Cisco Systems Financial Strength?

Cisco Systems has the Financial Strength Rank of 6.

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors:

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.

Cisco Systems's Interest Coverage for the quarter that ended in Apr. 2024 was 7.66. Cisco Systems's debt to revenue ratio for the quarter that ended in Apr. 2024 was 0.63. As of today, Cisco Systems's Altman Z-Score is 2.31.


Competitive Comparison of Cisco Systems's Financial Strength

For the Communication Equipment subindustry, Cisco Systems's Financial Strength, along with its competitors' market caps and Financial Strength data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Cisco Systems's Financial Strength Distribution in the Hardware Industry

For the Hardware industry and Technology sector, Cisco Systems's Financial Strength distribution charts can be found below:

* The bar in red indicates where Cisco Systems's Financial Strength falls into.



Cisco Systems Financial Strength Calculation

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

Cisco Systems's Interest Expense for the months ended in Apr. 2024 was $-357 Mil. Its Operating Income for the months ended in Apr. 2024 was $2,733 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Apr. 2024 was $20,102 Mil.

Cisco Systems's Interest Coverage for the quarter that ended in Apr. 2024 is

Interest Coverage=-1*Operating Income (Q: Apr. 2024 )/Interest Expense (Q: Apr. 2024 )
=-1*2733/-357
=7.66

The higher the ratio, the stronger the company's financial strength is.

2. Debt to revenue ratio. The lower, the better.

Cisco Systems's Debt to Revenue Ratio for the quarter that ended in Apr. 2024 is

Debt to Revenue Ratio=Total Debt (Q: Apr. 2024 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(11891 + 20102) / 50808
=0.63

3. Altman Z-Score.

Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

The zones of discrimination were as such:

When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.

Cisco Systems has a Z-score of 2.31, indicating it is in Grey Zones. This implies that Cisco Systems is in some kind of financial stress. If it is below 1.81, the company may faces bankrupcy risk.

Warning Sign:

Altman Z-score of 2.31 is in the grey area. This implies that the company is under some kind of financial stress. If it is below 1.8, the company may face bankruptcy risk.

* 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) Financial Strength Explanation

The maximum rank is 10. Companies with rank 7 or higher will be unlikely to fall into distressed situations. Companies with rank of 3 or less are likely in financial distress.

Cisco Systems has the Financial Strength Rank of 6.


Cisco Systems Financial Strength Related Terms

Thank you for viewing the detailed overview of Cisco Systems's Financial Strength provided by GuruFocus.com. Please click on the following links to see related term pages.


Cisco Systems (Cisco Systems) Business Description

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
Richard Scott Herren officer: EVP and CFO 851 WEST CYPRESS CREEK ROAD, FORT LAUDERDALE FL 33309
Maria Victoria Wong officer: SVP & Chief Acctg Officer C/O CISCO SYSTEMS, INC., 170 WEST TASMAN DRIVE, SAN JOSE CA 95134
Deborah L Stahlkopf officer: EVP and Chief Legal Officer 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
Mark Garrett director 106 EAST BABCOCK STREET SUITE 3A, BOZEMAN MT 59715
Maria Martinez officer: EVP, Chief Customer Exp Offcr THE LANDMARK @ 1 MARKET STREET, SUITE 300, SAN FRANCISCO CA 94105
Charles Robbins officer: SVP, Worldwide Sales 170 WEST TASMAN DRIVE, SAN JOSE CA 95134
Daniel H Schulman director C/O PAYPAL HOLDINGS, INC., 2211 NORTH FIRST STREET, SAN JOSE CA 95131
Roderick C Mcgeary director 1421 MCCRTHY BLVD, MILPITAS CA 95035
Prat Bhatt officer: VP, Corporate Controller & PAO 170 WEST TASMAN DRIVE, SAN JOSE CA 95134
Kristina M Johnson director 19 HEATH PL, DURHAM NC 27705
Sarah Rae Murphy director C/O CISCO SYSTEMS, INC., 170 WEST TASMAN DRIVE, SAN JOSE CA 95134
Geraldine Elliott officer: EVP, Chief Sales & Mktg Offcr 1194 N. MATHILDA AVE., SUNNYVALE CA 94089
M Michele Burns director C/O MARSH &MCLENNAN COMPANIES, INC., 1166 AVENUE OF THE AMERICAS, NEW YORK NY 10036-2774
Mark D Chandler officer: SVP, LglSrvs, GenCnsl & Secty 170 W TASMAN DRIVE, SAN JOSE CA 95134