Cisco Systems Inc (CSCO)
Profitability ratios
Return on sales
| Jul 31, 2024 | Jul 27, 2024 | Jul 31, 2023 | Jul 29, 2023 | Jul 31, 2022 | |
|---|---|---|---|---|---|
| Gross profit margin | 64.73% | 64.66% | 62.73% | 63.08% | 62.55% |
| Operating profit margin | 22.64% | 22.62% | 26.37% | 26.52% | 27.09% |
| Pretax margin | 22.74% | 22.71% | 26.87% | 27.02% | 28.08% |
| Net profit margin | 19.18% | 19.16% | 22.13% | 22.25% | 22.91% |
Cisco Systems Inc has shown a consistent improvement in its gross profit margin over the years, with an increase from 62.55% in July 2022 to 64.73% in July 2024. This indicates the company's ability to efficiently manage its production costs and generate a higher margin on its sales.
However, the operating profit margin and pretax margin have decreased from 27.09% and 28.08% in July 2022 to 22.64% and 22.74% in July 2024, respectively. This decline suggests that the company's operating expenses and taxes have increased relative to its sales revenue over this period.
Similarly, the net profit margin has decreased from 22.91% in July 2022 to 19.18% in July 2024, indicating that Cisco Systems Inc has experienced a reduction in its bottom line profitability. This decline could be attributed to various factors impacting the company's net income, such as increased operating expenses, taxes, or declines in revenue.
Overall, while Cisco Systems Inc has demonstrated strength in its gross profit margin, there is a notable decline in its profitability ratios, particularly in operating profit margin, pretax margin, and net profit margin. Further analysis would be required to understand the underlying reasons for these changes and evaluate the company's overall financial performance.
Return on investment
| Jul 31, 2024 | Jul 27, 2024 | Jul 31, 2023 | Jul 29, 2023 | Jul 31, 2022 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 9.79% | 9.79% | 14.76% | 14.76% | 14.86% |
| Return on assets (ROA) | 8.29% | 8.29% | 12.38% | 12.38% | 12.57% |
| Return on total capital | 29.13% | 18.72% | 35.50% | 30.87% | 37.30% |
| Return on equity (ROE) | 22.70% | 22.70% | 28.44% | 28.44% | 29.70% |
Cisco Systems Inc's profitability ratios indicate a stable trend in the company's performance. The Operating Return on Assets (Operating ROA) remained relatively consistent around the 14% mark from July 2022 to July 2023 before showing a slight decline to 9.79% in July 2024. This suggests that the company's operating income generated from its assets has been steady overall.
Similarly, the Return on Assets (ROA) also followed a similar pattern, maintaining levels around 12% from July 2022 to July 2023 and then decreasing to 8.29% in July 2024. This ratio indicates the company's ability to generate profits from its total assets, and the decline in 2024 may signal some challenges in asset utilization or profitability.
The Return on Total Capital ratio saw fluctuations over the years, with a significant drop from 37.30% in July 2022 to 18.72% in July 2024. This ratio reflects the company's profitability relative to the total capital employed, including both debt and equity. The decrease in 2024 suggests a decrease in overall profitability compared to the previous years.
Lastly, the Return on Equity (ROE) ratio depicts how efficiently the company is utilizing shareholders' equity to generate profits. The ROE remained consistent around 28-29% from July 2022 to July 2023 but decreased to 22.70% in July 2024. This decline may indicate a lower return to shareholders for their equity investments in the company.
Overall, while Cisco Systems Inc has shown relatively stable profitability ratios in the past few years, the decreasing trend observed in some ratios, especially in 2024, may require further analysis to understand the factors influencing the company's profitability and efficiency in utilizing assets and capital.