GURUFOCUS.COM » STOCK LIST » Latin America » Chile » XSGO » Cisco Systems Inc (XSGO:CSCO) » Definitions » Altman Z-Score
Switch to:

Cisco Systems (XSGO:CSCO) Altman Z-Score

: 3.46 (As of Today)
View and export this data going back to . Start your Free Trial

Good Sign:

Altman Z-score of 3.46 is strong.

Cisco Systems has a Altman Z-Score of 3.46, indicating it is in Safe Zones. This implies the Altman Z-Score is strong.

The zones of discrimination were as such:

When Altman Z-Score <= 1.8, it is in Distress Zones.
When Altman Z-Score >= 3, it is in Safe Zones.
When Altman Z-Score is between 1.8 and 3, it is in Grey Zones.

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

XSGO:CSCO' s Altman Z-Score Range Over the Past 10 Years
Min: 2.65   Med: 6.52   Max: 50.14
Current: 3.46

During the past 13 years, Cisco Systems's highest Altman Z-Score was 50.14. The lowest was 2.65. And the median was 6.52.


Cisco Systems Altman Z-Score Historical Data

The historical data trend for Cisco Systems's Altman Z-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 Z-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 3.06 3.36 3.32 3.62 3.25

Cisco Systems Quarterly Data
Apr18 Jul18 Oct18 Jan19 Apr19 Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22 Oct22 Jan23
Altman Z-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 3.71 3.56 3.25 3.34 3.39

Competitive Comparison

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

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

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



Cisco Systems Altman Z-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.

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

Z=1.2*X1+1.4*X2+3.3*X3+0.6*X4+1.0*X5
=1.2*0.1175+1.4*-0.0038+3.3*0.1513+0.6*3.7812+1.0*0.5547
=3.46

* 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 Z-Score when X4 or X5 value is 0.

Trailing Twelve Months (TTM) ended in Jan. 2023:
Total Assets was $95,840 Mil.
Total Current Assets was $38,515 Mil.
Total Current Liabilities was $27,252 Mil.
Retained Earnings was $-364 Mil.
Pre-Tax Income was 3415 + 3475 + 3416 + 3801 = $14,107 Mil.
Interest Expense was -107 + -100 + -93 + -90 = $-390 Mil.
Revenue was 13592 + 13632 + 13102 + 12835 = $53,161 Mil.
Market Cap (Today) was $205,569 Mil.
Total Liabilities was $54,366 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
=(38515 - 27252)/95840
=0.1175

X2=Retained Earnings/Total Assets
=-364/95840
=-0.0038

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(14107 - -390)/95840
=0.1513

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=205569.372/54366
=3.7812

X5=Revenue/Total Assets
=53161/95840
=0.5547

The zones of discrimination were as such:

Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones

Cisco Systems has a Altman Z-Score of 3.46 indicating it is in Safe Zones.

Study by Altman found that companies that are in Distress Zone have more than 80% of chances of bankruptcy in two years.


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

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, Market Value of Equity/Book Value of Total Liabilities (MVE/TL): The measure shows how much the firm's assets can decline in value (measured by market value of equity plus debt) before the liabilities exceed the assets and the firm becomes insolvent.

X5, Revenue/Total Assets (S/TA): The capital-turnover ratio is a standard financial ratio illustrating the sales generating ability of the firm's assets.

Read more about Altman Z-Score and the original research.


Be Aware

Altman Z-Score does not apply to financial companies.


Cisco Systems Altman Z-Score Related Terms

Thank you for viewing the detailed overview of Cisco Systems's Altman Z-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

Other Sources