Cisco Systems Inc (CSCO)
Liquidity ratios
| Jul 31, 2024 | Jul 27, 2024 | Jul 31, 2023 | Jul 29, 2023 | Jul 31, 2022 | |
|---|---|---|---|---|---|
| Current ratio | 0.91 | 0.91 | 1.38 | 1.38 | 1.43 |
| Quick ratio | 0.44 | 0.69 | 0.84 | 1.13 | 0.75 |
| Cash ratio | 0.44 | 0.44 | 0.84 | 0.84 | 0.75 |
Cisco Systems Inc's liquidity ratios have shown some fluctuations over the past few years.
The current ratio has decreased from 1.43 in July 2022 to 0.91 in July 2024, indicating a potential deterioration in the company's ability to cover its short-term obligations with its current assets. A current ratio below 1 may raise concerns about liquidity and the company's ability to meet its short-term liabilities.
The quick ratio demonstrates a similar trend, dropping from 0.75 in July 2022 to 0.44 in July 2024. This suggests a decline in Cisco's ability to meet its short-term obligations without relying on inventory, which could signal potential liquidity challenges.
The cash ratio has also declined over the period, from 0.75 in July 2022 to 0.44 in July 2024. This ratio measures the company's ability to cover its short-term liabilities solely with cash and cash equivalents, and a decreasing trend could indicate a reduced ability to meet immediate financial obligations without relying on other current assets.
Overall, the decreasing trend in these liquidity ratios raises concerns about Cisco Systems Inc's short-term liquidity position and highlights the importance of closely monitoring its ability to meet its financial commitments in the near future.
See also:
Additional liquidity measure
| Jul 31, 2024 | Jul 27, 2024 | Jul 31, 2023 | Jul 29, 2023 | Jul 31, 2022 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 64.88 | 79.47 | 62.61 | 73.70 | 48.54 |
The cash conversion cycle of Cisco Systems Inc has exhibited fluctuations over the period under review. As of July 31, 2022, the company's cash conversion cycle stood at 48.54 days, indicating the efficiency with which Cisco is able to convert its investments in inventory and accounts receivable into cash.
Subsequently, there was an increase in the cash conversion cycle to 73.70 days as of July 29, 2023, suggesting a potential slowdown in the company's ability to convert its resources into cash. However, the cycle improved slightly to 62.61 days by July 31, 2023.
The pattern continued with a significant increase to 79.47 days as of July 27, 2024, before a partial recovery to 64.88 days by July 31, 2024. This fluctuation in the cash conversion cycle indicates potential challenges in managing inventory, receivables, and payables efficiently.
Overall, Cisco Systems Inc should focus on optimizing its working capital management to enhance its cash conversion cycle, improve liquidity, and strengthen its overall financial performance.