Cisco Systems Inc (CSCO)
Liquidity ratios
| Jul 31, 2025 | Apr 30, 2025 | Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Jul 27, 2024 | Apr 30, 2024 | Apr 27, 2024 | Jan 31, 2024 | Jan 27, 2024 | Oct 31, 2023 | Oct 28, 2023 | Jul 31, 2023 | Jul 29, 2023 | Apr 30, 2023 | Apr 29, 2023 | Jan 31, 2023 | Jan 28, 2023 | Oct 31, 2022 | Oct 29, 2022 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.01 | 0.95 | 0.87 | 0.88 | 0.91 | 0.91 | 0.89 | 0.89 | 1.37 | 1.37 | 1.47 | 1.47 | 1.38 | 1.38 | 1.39 | 1.39 | 1.41 | 1.41 | 1.45 | 1.45 |
| Quick ratio | 0.65 | 0.69 | 0.64 | 0.65 | 0.69 | 0.69 | 0.68 | 0.68 | 1.10 | 1.10 | 1.18 | 1.18 | 1.13 | 1.13 | 1.11 | 1.11 | 1.13 | 1.13 | 1.16 | 1.16 |
| Cash ratio | 0.46 | 0.45 | 0.42 | 0.46 | 0.44 | 0.44 | 0.47 | 0.47 | 0.83 | 0.83 | 0.87 | 0.87 | 0.84 | 0.84 | 0.81 | 0.81 | 0.81 | 0.81 | 0.79 | 0.79 |
The analysis of Cisco Systems Inc.'s liquidity ratios over the specified period reveals several key insights into its short-term financial health.
Current Ratio:
The current ratio has generally remained above 1.4 from October 2022 through early 2024, indicating that Cisco had sufficient current assets to cover its current liabilities during this time. However, a noticeable decline occurs starting April 2024, with the ratio dropping sharply to 0.89, and maintaining near this level through mid-2025. This significant decrease suggests a deterioration in liquidity, indicating that the company's current assets are no longer adequately covering its short-term obligations, and could reflect potential liquidity challenges or asset reclassification.
Quick Ratio:
Similarly, the quick ratio demonstrates stability around 1.1 to 1.2 during 2022 and early 2023. A slight increase is observed in late 2023, reaching 1.18, further illustrating sufficient immediate liquidity. Nonetheless, a substantial reduction occurs in April 2024, with the quick ratio dropping to approximately 0.68, and remaining below 1 through 2025. This decline indicates a reduced ability to meet short-term liabilities with its most liquid assets, such as receivables and cash equivalents, hinting at tightening liquidity conditions.
Cash Ratio:
The cash ratio, measuring the most liquid assets, shows a stable trend around 0.79 to 0.87 through October 2023. Yet, starting April 2024, it decreases sharply to approximately 0.47, and remains at or below this level into 2025. The persistent decline in this ratio reflects diminished cash or cash-equivalent holdings relative to short-term liabilities, pointing toward a potential strain on the company's immediate liquidity position.
Overall, the data indicates that Cisco's liquidity position was strong and stable up to early 2024, with current, quick, and cash ratios comfortably above critical thresholds of 1, suggesting adequate short-term solvency. However, starting in April 2024, all three ratios experience a significant decline, especially the current and quick ratios, falling below 1. This pattern signals a concerning reduction in liquidity, which warrants further investigation into underlying operational or cash management factors that may have contributed to this deterioration.
See also:
Additional liquidity measure
| Jul 31, 2025 | Apr 30, 2025 | Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Jul 27, 2024 | Apr 30, 2024 | Apr 27, 2024 | Jan 31, 2024 | Jan 27, 2024 | Oct 31, 2023 | Oct 28, 2023 | Jul 31, 2023 | Jul 29, 2023 | Apr 30, 2023 | Apr 29, 2023 | Jan 31, 2023 | Jan 28, 2023 | Oct 31, 2022 | Oct 29, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 53.65 | 64.84 | 73.32 | 69.14 | 83.92 | 85.21 | 77.49 | 74.76 | 74.96 | 71.97 | 66.92 | 66.87 | 73.71 | 75.76 | 69.08 | 70.02 | 70.09 | 70.38 | 67.18 | 68.23 |
The analysis of Cisco Systems Inc's cash conversion cycle (CCC) over the observed period reveals notable fluctuations that reflect variations in the company's operational efficiency and liquidity management.
Initially, the CCC exhibited a relatively stable level around the mid-60s to low 70s days from October 2022 through April 2023, with values ranging approximately from 66.87 days to 70.38 days. This consistency suggests that during this period, Cisco maintained relatively steady inventory turnover, receivables collection periods, and payables deferral.
However, beginning in July 2023, there is a discernible upward trend. The CCC increased significantly, reaching approximately 75.76 days and peaking at around 85.21 days in July 2024. This rise indicates that Cisco’s net operating cycle extended, primarily due to longer receivables periods, delaying cash inflows relative to payables and inventory turnover. An extended CCC corresponds to increased working capital requirements and potentially slower cash collection or inventory management issues.
Subsequently, from the peak in mid-2024, a downward trend is observed, with the CCC decreasing to approximately 69.14 days by October 2024 and further declining to about 53.65 days by July 2025. The reduction suggests improvements in receivables collection efficiency, inventory management, or a combination thereof, resulting in a shorter operating cycle and enhanced cash flow liquidity.
Overall, the period analyzed demonstrates cyclical patterns in Cisco’s CCC, characterized by stability in late 2022 and early 2023, a notable elongation during mid to late 2023 and early 2024, followed by a recovery towards a more efficient cycle in mid-2025. These movements may reflect strategic shifts in credit policies, supplier terms, inventory strategies, or external market conditions impacting the company’s operational efficiency and liquidity management.