Cisco Systems Inc (CSCO)

Cash conversion cycle

		Jul 31, 2025	Jul 31, 2024	Jul 27, 2024	Jul 31, 2023	Jul 29, 2023
Days of inventory on hand (DOH)	days	55.18	64.88	36.44	62.61	38.66
Days of sales outstanding (DSO)	days	62.89	68.00	67.92	58.95	59.58
Number of days of payables	days	45.07	44.32	24.89	39.74	24.54
Cash conversion cycle	days	73.00	88.56	79.47	81.82	73.70

July 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 55.18 + 62.89 – 45.07
= 73.00

The analysis of Cisco Systems Inc.'s cash conversion cycle (CCC) over the specified periods reveals fluctuations in operational efficiency relating to the management of receivables, inventories, and payables. As of July 29, 2023, the CCC was approximately 73.70 days, indicating the average duration required for Cisco to convert its investments in inventory and receivables into cash, net of the period it takes to pay its suppliers. This figure increased slightly to 81.82 days by July 31, 2023, suggesting a marginal elongation in the cycle, potentially due to extended receivables or inventories or delayed payables.

The following year, by July 27, 2024, the CCC increased to approximately 79.47 days, reflecting a slight reduction in cycle length relative to the previous year but still higher than the initially observed value in July 2023. The data shows a further increase to 88.56 days by July 31, 2024, implying a lengthening of the cycle, which could signal longer collection periods, increased inventory holding, or slower payable turnover.

Interestingly, by July 31, 2025, the CCC decreased again to approximately 73.00 days, reverting closer to the initial cycle length observed in mid-2023. This reduction may indicate an improvement in the company's cash conversion efficiency, possibly through more efficient receivables collection, inventory management, or a change in payable practices.

Overall, the variation in Cisco's cash conversion cycle over these fiscal periods suggests an evolving operational efficiency, with periods of elongation and subsequent shortening. The fluctuations may reflect strategic adjustments, seasonal effects, or operational initiatives aimed at optimizing the cycle duration. The reduction in the CCC at the most recent date points to a potential enhancement in liquidity management, which could positively influence cash flow and working capital management moving forward.