Cisco Systems Inc (CSCO)
Profitability ratios
Return on sales
| Jul 31, 2025 | Jul 31, 2024 | Jul 27, 2024 | Jul 31, 2023 | Jul 29, 2023 | |
|---|---|---|---|---|---|
| Gross profit margin | 63.87% | 64.73% | 64.66% | 62.73% | 63.08% |
| Operating profit margin | 22.81% | 22.64% | 22.62% | 26.37% | 26.52% |
| Pretax margin | 20.22% | 22.74% | 22.71% | 26.87% | 27.02% |
| Net profit margin | 18.45% | 19.18% | 19.16% | 22.13% | 22.25% |
The profitability ratios of Cisco Systems Inc. over the specified periods demonstrate certain trends and insights into the company's financial performance.
Gross profit margin reflects the core profitability of the company's products and services before operating expenses. The data indicates a stable and slightly increasing trend in gross profit margin, with values ranging from 62.73% on July 31, 2023, to a peak of 64.73% on July 31, 2024. This suggests effective cost management or favorable pricing strategies that have maintained or improved the company's gross profitability during this period.
The operating profit margin, which considers operating expenses alongside gross profit, shows a modest decline from approximately 26.52% on July 29, 2023, to about 22.81% on July 31, 2025. The decrease indicates subsequent compression in operating profitability, potentially due to rising operating costs, investments, or strategic expenses, despite the stable gross margin.
Pre-tax margin data further corroborates this trend, declining from 27.02% in July 2023 to 20.22% in July 2025. The reduction in pre-tax margin suggests that factors beyond operating expenses, such as interest costs or other financial activities, may have contributed to the decline in profitability.
The net profit margin, which captures the final profit after all expenses including taxes, also demonstrates a downward trajectory, decreasing from 22.25% on July 29, 2023, to 18.45% on July 31, 2025. This trend indicates a diminishing proportion of revenue translating into net income, which could be reflective of increased tax burdens, higher financial costs, or other non-operational expenses impacting the bottom line.
In summary, while Cisco Systems Inc. has maintained stable gross margins, indicating consistent revenue and cost control at the product level, the overall profitability ratios (operating, pre-tax, and net margins) have exhibited a gradual decline over the analyzed periods. This pattern suggests pressures on profitability deeper in the income statement, warranting further analysis of operating costs, tax strategies, and financial expenses to fully understand the underlying causes.
Return on investment
| Jul 31, 2025 | Jul 31, 2024 | Jul 27, 2024 | Jul 31, 2023 | Jul 29, 2023 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 10.55% | 9.79% | 9.79% | 14.76% | 14.76% |
| Return on assets (ROA) | 8.53% | 8.29% | 8.29% | 12.38% | 12.38% |
| Return on total capital | 27.69% | 29.13% | 18.72% | 35.50% | 30.87% |
| Return on equity (ROE) | 22.19% | 22.70% | 22.70% | 28.44% | 28.44% |
The profitability ratios of Cisco Systems Inc. reveal notable trends over the specified periods. The Operating Return on Assets (Operating ROA) experienced a decline from 14.76% as of July 29 and 31, 2023, to 9.79% by July 27, 2024, indicating a decrease in operational efficiency relative to the company’s assets. However, there was a modest recovery to 10.55% as of July 31, 2025, suggesting some improvement in operational performance.
Similarly, the Return on Assets (ROA) dropped from 12.38% in the 2023 period to 8.29% in 2024, before slightly increasing to 8.53% in 2025. This downward trend across the periods signifies reduced overall profitability in generating net income from the company’s assets, though the slight uptick in 2025 indicates some stabilization or marginal improvement.
The Return on Total Capital exhibited a fluctuating pattern. It was relatively high at 30.87% in July 2023 and increased further to 35.50% shortly thereafter but then contracted sharply to 18.72% as of July 2024. Entering the following year, it recovered to 29.13%, yet then declined again to 27.69% by July 2025. These fluctuations reflect variability in the company's efficiency in generating returns from its total capital base, possibly influenced by changes in leverage or operational factors.
The Return on Equity (ROE) displayed a stable value of 28.44% during the 2023 period, but it decreased to 22.70% in 2024 and further to 22.19% in 2025. The declining ROE underscores a reduction in net profitability attributable to shareholders, potentially linked to lower net income margins, increased equity, or a combination thereof.
Overall, the data indicates that Cisco Systems Inc.’s profitability ratios have generally declined from their 2023 levels through 2024, with signs of slight recovery or stabilization in 2025. The trends suggest a period of reduced operational efficiency and profitability, warranting further investigation into underlying factors affecting income generation relative to assets, capital, and equity.