Cisco Systems Inc (CSCO)

The liquidity ratios of Cisco Systems Inc. over the specified periods indicate shifts in its short-term financial position.

The Current Ratio remained stable at 1.38 on July 29 and July 31, 2023, suggesting that at that time, the company had 1.38 times the current assets relative to its current liabilities, reflecting a comfortable liquidity position. However, by July 27 and July 31, 2024, the current ratio declined to 0.91, indicating a deterioration in liquidity; the company's current assets were slightly insufficient to cover its current liabilities. This decline suggests increased short-term obligations or a reduction in current assets, which could impact the company's ability to meet its short-term commitments without additional financing or asset liquidation. The ratio improved modestly to 1.01 by July 31, 2025, slightly surpassing the threshold of 1, implying a marginal recovery in liquidity.

The Quick Ratio followed a similar pattern. It was 1.13 on July 29 and July 31, 2023, signifying that the company's most liquid assets (excluding inventory) were sufficient to cover its current liabilities by 1.13 times. This ratio declined sharply to 0.69 in July 2024, indicating that liquid assets excluding inventory were less than current liabilities, pointing to a potential liquidity concern. By the end of July 2025, the quick ratio increased slightly to 0.74, yet remained below the ideal threshold of 1, which suggests ongoing liquidity constraints, although the situation shows some improvement compared to the previous year.

The Cash Ratio, which measures the company's ability to cover its current liabilities solely with cash and cash equivalents, was 0.84 on July 29 and July 31, 2023. This indicates a strong cash position relative to current liabilities during that period. However, by July 27 and July 31, 2024, the cash ratio decreased to 0.44, reflecting a significant reduction in cash holdings relative to liabilities and thus a reduction in immediate liquidity. By July 31, 2025, the cash ratio experienced a slight increase to 0.46, but it remained less than half of the current liabilities, indicating that the company's cash reserves were insufficient on their own to meet short-term obligations.

Overall, the liquidity ratios depict a trend of diminished liquidity from 2023 through 2024, with improvements observed in mid-2025. The decline in the current, quick, and cash ratios during 2024 suggests increased short-term liquidity risks, potentially due to either a decrease in liquid assets or an increase in current liabilities. The partial recovery in 2025 indicates efforts to bolster liquidity, but ratios remain below optimal levels, highlighting ongoing challenges in meeting short-term obligations solely through liquid assets.

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See also:

Cisco Systems Inc Liquidity Ratios

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Additional liquidity measure

The cash conversion cycle (CCC) of Cisco Systems Inc. exhibits variability over the observed period, with values ranging from a low of 73.00 days in July 2025 to a high of 88.56 days in July 2024. Specifically, on July 29, 2023, the CCC was 73.70 days, indicating Cisco’s operational cycle American slightly below the 74-day mark at that time. By July 31, 2023, the CCC increased to 81.82 days, reflecting a longer cycle of approximately 82 days. This upward trend continued, reaching a peak of 88.56 days in July 2024, suggesting a period where the company's operating cycle took longer to convert investments in inventory and receivables back into cash.

Following this peak, a significant reduction in the CCC occurs by July 31, 2025, bringing the figure down to 73.00 days. This decline indicates an improvement in the company’s cash flow efficiency, with a cycle duration comparable to the earlier period in 2023. Overall, the fluctuations suggest that Cisco has experienced periods of extended operational cycles, particularly in mid-2024, followed by efforts to shorten the cycle by mid-2025.

The cyclical trend in the CCC implies that Cisco’s operational efficiency and liquidity management strategies have evolved over time, possibly in response to external market conditions, supply chain factors, or internal operational changes. The observed decrease near the July 2025 mark denotes an improved cash conversion efficiency, which could be interpreted as a positive indicator of cash flow management and operational agility.