Cisco Systems Inc (CSCO)

Liquidity ratios

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 Jul 31, 2022 Jul 30, 2022
Current ratio 0.87 0.88 0.91 0.91 0.80 0.89 1.27 1.37 1.47 1.47 1.38 1.38 1.39 1.39 1.41 1.41 1.45 1.45 1.43 1.43
Quick ratio 0.42 0.46 0.44 0.69 0.49 0.68 0.85 1.10 0.87 1.18 0.84 1.13 0.81 1.11 0.81 1.13 0.79 1.16 0.75 1.16
Cash ratio 0.42 0.46 0.44 0.44 0.49 0.47 0.85 0.83 0.87 0.87 0.84 0.84 0.81 0.81 0.81 0.81 0.79 0.79 0.75 0.75

Cisco Systems Inc's liquidity ratios, namely the current ratio, quick ratio, and cash ratio, reflect the company's ability to meet its short-term obligations with its current assets.

Looking at the current ratio, which measures current assets against current liabilities, Cisco's current ratio has generally been above 1 in the past few years, indicating that the company has sufficient current assets to cover its current liabilities. However, there has been a slight decline in the current ratio from around 1.45 to 1.27 in the latest period, which may raise some concerns about the company's short-term liquidity position.

The quick ratio, a more stringent measure of liquidity than the current ratio, takes into account only the most liquid assets (such as cash and equivalents) to cover current liabilities. Cisco's quick ratio has also shown a downward trend, falling from around 1.18 to 0.42 in the latest period. This suggests that the company may have difficulty meeting its short-term obligations using only its most liquid assets.

Lastly, the cash ratio, which focuses solely on cash and cash equivalents relative to current liabilities, has followed a similar downward trajectory as the quick ratio. This indicates that Cisco's ability to cover its short-term liabilities with cash on hand has weakened over time.

Overall, while Cisco Systems Inc has maintained a current ratio above 1, signaling a healthy liquidity position in the past, the declining trend in both the quick ratio and cash ratio raises concerns about the company's ability to meet its short-term obligations solely with its most liquid assets. Investors and stakeholders should closely monitor Cisco's liquidity position in the future to assess any potential liquidity risks.


See also:

Cisco Systems Inc Liquidity Ratios (Quarterly Data)


Additional liquidity measure

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 Jul 31, 2022 Jul 30, 2022
Cash conversion cycle days 45.84 49.80 46.51 85.21 45.70 74.86 45.52 71.97 43.49 66.87 46.89 75.76 46.49 70.02 42.52 70.38 36.39 68.23 41.63 78.97

The cash conversion cycle measures how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales. In the case of Cisco Systems Inc, the cash conversion cycle has fluctuated over the years.

From July 30, 2022, to January 31, 2025, the cash conversion cycle ranged from a high of 85.21 days to a low of 36.39 days. A shorter cash conversion cycle is generally favorable as it indicates that the company is efficiently managing its working capital and quickly turning its resources into cash.

Looking at the trend, there seems to be some fluctuations in the cash conversion cycle of Cisco Systems Inc over time. It is important to further analyze the factors contributing to these fluctuations to understand the company's efficiency in managing its inventory, accounts receivable, and accounts payable.

Overall, the cash conversion cycle is an important metric to assess how well a company like Cisco Systems Inc is managing its cash flow and working capital, and it can provide insights into the company's operational efficiency and financial health.