Cisco

Key Performance Metrics

  • The review of Net Profit Margin witnessed a mixed trend. Net Profit Margin improved from 20.02% in 2017 to 21.26% in 2021.
  • The average EBIT Margin for the period under analysis was 26.1%, with 2017 and 2020 performing the worst and best, respectively.
  • In the current year, Cisco was able to cover its interest liabilities 29.57 times in the current year- compared to 2017 when it was 13.91 times.
  • The Asset turnover stood at 0.51 times in 2021 from 0.37 in 2017, implying a high performance on Assets of the business in relation to revenue.

Profitability

  • The revenue of Cisco has been consistent year on year. The revenue increased by 2.7% between 2017 and 2018 and a further 5.2% increase was recorded between 2018 and 2019. There also occurred a/an increase of 1% between 2020 and 2021 (the current period). 
  • Cisco’s performance in profitability looks good as the return on capital employed also recorded good performance during the period of analysis.

Liquidity

  • The company’s result in liquidity looks poor, as current ratio/acid test increased from 1.72:1/1.67:1 to 1.49:1/1.43:1 on the last year. Which implies that the company [does not have]/has enough assets to settle its current liabilities.

Capital Structure

  • Cisco is both equity and debt financed.
  • The debt-to-equity (D/E) ratio has been falling year on year. The gearing position of the company appears to be high as it stood at 136% in the current year.

Source: Cisco Annual Report

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