Cisco Systems Inc (CSCO)
Activity ratios
Short-term
Turnover ratios
| Jul 27, 2024 | Jul 29, 2023 | Jul 30, 2022 | Jul 31, 2021 | Jul 25, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 10.02 | 9.44 | 12.00 | 19.51 | 22.91 |
| Receivables turnover | 5.37 | 6.13 | 4.89 | 4.90 | 4.66 |
| Payables turnover | 14.66 | 14.88 | 13.51 | 12.87 | 13.24 |
| Working capital turnover | — | 4.71 | 4.64 | 3.87 | 2.69 |
Inventory turnover indicates how effectively Cisco Systems Inc manages its inventory levels. The company's inventory turnover has been relatively stable over the past five years, ranging from 9.44 to 22.91, with a current ratio of 10.02 in 2024. This suggests that Cisco is selling its inventory multiple times a year, which is generally positive and indicates efficient inventory management.
Receivables turnover measures how efficiently Cisco collects payments from customers. The company's receivables turnover has fluctuated over the years, with a range of 4.66 to 6.13. In 2024, the ratio stands at 5.37, indicating that Cisco is collecting payments from customers approximately 5.37 times a year. This suggests that the company has been effective in managing its accounts receivable.
Payables turnover reflects how quickly Cisco pays its suppliers. The payables turnover ratio for Cisco has varied between 12.87 and 14.88 over the past five years, with a ratio of 14.66 in 2024. This indicates that Cisco is paying its suppliers approximately 14.66 times a year, which implies good management of payables.
Working capital turnover measures how effectively Cisco utilizes its working capital to generate sales. The working capital turnover ratio has been increasing over the years, from 2.69 in 2020 to 4.71 in 2023. However, in 2024, the data is not available. A higher working capital turnover ratio generally signifies efficient use of working capital to drive sales.
In conclusion, Cisco Systems Inc demonstrates efficient management of inventory, accounts receivable, and accounts payable based on the analysis of its activity ratios.
Average number of days
| Jul 27, 2024 | Jul 29, 2023 | Jul 30, 2022 | Jul 31, 2021 | Jul 25, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 36.44 | 38.66 | 30.41 | 18.71 | 15.93 |
| Days of sales outstanding (DSO) | days | 67.92 | 59.58 | 74.63 | 74.53 | 78.40 |
| Number of days of payables | days | 24.89 | 24.54 | 27.01 | 28.35 | 27.56 |
Days of Inventory on Hand (DOH) is a measure of how quickly Cisco Systems Inc is able to sell its inventory. The trend over the past five years shows an increase in the number of days it takes to sell its inventory, indicating that Cisco has been carrying inventory for longer periods. This could suggest either slowing sales or overstocking.
Days of Sales Outstanding (DSO) represents how long it takes for Cisco to collect payments from its customers. The trend shows fluctuations in DSO over the years, with a peak in 2021. A higher DSO can indicate issues with credit policies or difficulties in collecting payments promptly.
The Number of Days of Payables measures how long it takes for Cisco to pay its suppliers. The trend indicates a fluctuation in the number of days it takes to pay suppliers over the years. A longer number of days of payables may suggest favorable credit terms from suppliers or potential liquidity constraints.
Overall, the activity ratios for Cisco Systems Inc show some variability over the years, with fluctuations in inventory turnover, collection of receivables, and payment of payables. Monitoring these ratios can help identify areas where Cisco may need to optimize its working capital management.
See also:
Cisco Systems Inc Short-term (Operating) Activity Ratios
Long-term
| Jul 27, 2024 | Jul 29, 2023 | Jul 30, 2022 | Jul 31, 2021 | Jul 25, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 25.77 | 27.19 | 25.73 | 21.25 | 19.97 |
| Total asset turnover | 0.43 | 0.56 | 0.55 | 0.51 | 0.52 |
Cisco Systems Inc's long-term activity ratios, specifically the fixed asset turnover and total asset turnover, provide insights into the company's efficiency in utilizing its assets to generate revenue.
The fixed asset turnover ratio has shown a consistent trend of improvement over the past five years, indicating that Cisco has been able to generate more revenue per dollar of fixed assets invested. This suggests that the company has been effectively using its fixed assets to drive sales and increase productivity.
On the other hand, the total asset turnover ratio experienced fluctuations but generally remained relatively stable over the same period. This implies that Cisco has been able to generate a consistent level of sales relative to its total assets.
Overall, these ratios suggest that Cisco Systems Inc has been managing its long-term assets efficiently and effectively, turning them into revenue and maintaining a healthy level of activity in its operations over the years.