Cisco Systems Inc (CSCO)
Solvency ratios
| Jul 31, 2025 | Jul 31, 2024 | Jul 27, 2024 | Jul 31, 2023 | Jul 29, 2023 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.16 | 0.00 | 0.07 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.30 | 0.00 | 0.13 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.43 | 0.00 | 0.15 |
| Financial leverage ratio | 2.60 | 2.74 | 2.74 | 2.30 | 2.30 |
The analysis of Cisco Systems Inc.'s solvency ratios over the specified periods reveals the following insights:
1. Debt-to-Assets Ratio: The ratio fluctuates between near-zero and moderate levels over the observed timeline. Specifically, it was 0.07 on July 29, 2023, then dipped to 0.00 on July 31, 2023, indicating minimal or no leverage at that time. A notable increase occurred by July 27, 2024, reaching 0.16, suggesting a slight rise in the proportion of assets financed through debt. However, the ratio again dropped to zero on July 31, 2024, and remained at that level into July 31, 2025, implying near-complete elimination of debt relative to total assets by these dates.
2. Debt-to-Capital Ratio: This ratio shows a similar pattern. It was 0.13 on July 29, 2023, and zero on July 31, 2023. There was a significant increase to 0.30 by July 27, 2024, indicating a higher proportion of debt within the company's capital structure. Subsequently, the ratio reverted to zero on July 31, 2024, and remained so through July 31, 2025, signifying a cessation of debt impact within capital.
3. Debt-to-Equity Ratio: The ratio was 0.15 on July 29, 2023, and zero on July 31, 2023. It increased markedly to 0.43 on July 27, 2024, reflecting a period where debt constituted a more significant portion of equity financing. Like the other ratios, it reverted to zero on July 31, 2024, and remained at that level into the following year, pointing to minimal or no leverage from debt relative to equity.
4. Financial Leverage Ratio: This ratio remained stable at 2.30 between July 29 and July 31, 2023. It increased to 2.74 on July 27, 2024, indicating that the company's total assets were financed approximately 2.74 times by equity and debt combined, representing heightened leverage during that period. The ratio then stabilized at 2.74 on July 31, 2024, before slightly decreasing to 2.60 on July 31, 2025, signaling a reduction in leverage but still maintaining a relatively high level of financial leverage.
Overall Assessment: The ratios suggest periods of increased leverage followed by a significant reduction toward minimal or no debt levels. The fluctuations in debt-related ratios highlight strategic adjustments in the company's capital structure over time. The high financial leverage at certain points indicates a reliance on debt during those periods, whereas the subsequent reversion to near-zero debt ratios reflects a shift towards a more conservatively financed structure. This pattern suggests that Cisco Systems Inc. manages its leverage dynamically, possibly to optimize financial stability and risk.
Coverage ratios
| Jul 31, 2025 | Jul 31, 2024 | Jul 27, 2024 | Jul 31, 2023 | Jul 29, 2023 | |
|---|---|---|---|---|---|
| Interest coverage | 8.19 | 13.16 | 12.11 | 36.87 | 36.87 |
The interest coverage ratios for Cisco Systems Inc. exhibit notable fluctuations over the analyzed period. As of July 29 and July 31, 2023, the ratio stood at a robust 36.87, indicating that the company's earnings before interest and taxes significantly exceeded its interest obligations—specifically, approximately 37 times, which reflects a high level of financial stability and an excellent capacity to service interest expenses.
However, by July 27, 2024, the interest coverage ratio declined sharply to 12.11, and further decreased slightly to 13.16 by July 31, 2024. Despite this reduction, the ratio still remains substantially above the commonly accepted threshold of 3 to 4, suggesting that the company continues to possess a comfortable cushion to meet its interest payments.
Looking forward, the forecasted ratio for July 31, 2025, indicates a further decrease to 8.19. Although this represents a downward trend, the ratio remains well above typical danger levels, implying that Cisco's earnings are expected to continue sufficiently covering interest obligations in the near term.
In summary, the interest coverage ratio for Cisco Systems Inc. has experienced a considerable decline from very high levels in 2023 to more moderate, yet still healthy, levels projected in the subsequent years. This trend warrants monitoring, as continued decreases could signal evolving financial dynamics, but overall, the ratios suggest a strong capacity to meet interest expenses across the analyzed timeline.