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Cisco Systems (XSGO:CSCO) Altman Z2-Score

: 2.58 (As of Today)
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Cisco Systems has a Altman Z2-Score of 2.58, 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 face bankrupcy risk.

The zones of discrimination were as such:

When Altman Z2-Score <= 1.1, it is in Distress Zones.
When Altman Z2-Score >= 2.6, it is in Safe Zones.
When Altman Z2-Score is between 1.1 and 2.6, it is in Grey Zones.

The historical rank and industry rank for Cisco Systems's Altman Z2-Score or its related term are showing as below:

XSGO:CSCO' s Altman Z2-Score Range Over the Past 10 Years
Min: 2.49   Med: 5.44   Max: 14.3
Current: 2.58

During the past 13 years, Cisco Systems's highest Altman Z2-Score was 14.30. The lowest was 2.49. And the median was 5.44.


Cisco Systems Altman Z2-Score Historical Data

The historical data trend for Cisco Systems's Altman Z2-Score 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
Altman Z2-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 3.69 2.49 2.90 2.56 2.56

Cisco Systems Quarterly Data
Jul18 Oct18 Jan19 Apr19 Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22 Oct22 Jan23 Apr23
Altman Z2-Score 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 2.72 2.56 2.63 2.58 2.58

Competitive Comparison

For the Communication Equipment subindustry, Cisco Systems's Altman Z2-Score, along with its competitors' market caps and Altman Z2-Score 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 Altman Z2-Score Distribution

For the Hardware industry and Technology sector, Cisco Systems's Altman Z2-Score distribution charts can be found below:

* The bar in red indicates where Cisco Systems's Altman Z2-Score falls in comparison to its industry or sector. The grey bar indicates the Altman Z2-Score's extreme value range as defined by GuruFocus.



Cisco Systems Altman Z2-Score Calculation

Altman 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.

Z2-Score, also known as Z"-Score is the Z-Score for non-manufacturing companies excluding property/financial companies.

Cisco Systems's Altman Z2-Score for today is calculated with this formula:

Z=6.56*X1+3.26*X2+6.72*X3+1.05*X4_2
=6.56*0.1152+3.26*0.0027+6.72*0.1504+1.05*0.7657
=2.58

* 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. GuruFocus does not calculate Altman Z2-Score when X4_2 value is 0.

Trailing Twelve Months (TTM) ended in Apr. 2023:
Total Assets was $97,529 Mil.
Total Current Assets was $39,950 Mil.
Total Current Liabilities was $28,719 Mil.
Retained Earnings was $262 Mil.
Pre-Tax Income was 3957 + 3415 + 3475 + 3416 = $14,263 Mil.
Interest Expense was -109 + -107 + -100 + -93 = $-409 Mil.
Total Liabilities was $55,234 Mil.

* Note that for stock reported semi-annually or annually, GuruFocus uses latest annual data as the TTM data.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(39950 - 28719)/97529
=0.1152

X2=Retained Earnings/Total Assets
=262/97529
=0.0027

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(14263 - -409)/97529
=0.1504

X4_2=Net Worth/Total Liabilities
=(Total Stockholders Equity - Preferred Stock)/Total Liabilities
=(42295 - 0)/55234
=0.7657

The zones of discrimination were as such:

Distress Zones - 1.1 < Grey Zones < 2.6 - Safe Zones

Cisco Systems has a Altman Z2-Score of 2.58 indicating it is in Grey Zones.


Cisco Systems  (XSGO:CSCO) Altman Z2-Score Explanation

The original Z-Score model was based on publicly traded manufacturing companies while the Z2-Score, also known as Z"-score can be used for any type of company excluding property/financial companies. Both Z-Score and Z2-Score describes the financial health of a company, and its likelihood of financial distress.

X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.

X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.

X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firm's assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.

X4_2, Net Worth (Total Stockholders Equity - Preferred Stock)/Total Liabilities (NW/TL): it compares a company’s stock net worth with its total liabilities and can be used to assess the extent of its reliance on debt.

Read more about Altman Z2-Score, the original research on Z-Score and the additional research on Z2-Score.


Be Aware

Altman Z2-Score does not apply to financial companies.


Cisco Systems Altman Z2-Score Related Terms

Thank you for viewing the detailed overview of Cisco Systems's Altman Z2-Score provided by GuruFocus.com. Please click on the following links to see related term pages.


Cisco Systems (XSGO: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.

Cisco Systems (XSGO:CSCO) Headlines