Goodwill and Intangible Asset Disclosure
Adjustments to Financial Statements: Removal of Goodwill
Adjusted Financial Ratios: Removal of Goodwill (Summary)
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Cisco Systems Inc., balance sheet: goodwill and intangible assets

US$ in millions

	Jul 29, 2023	Jul 30, 2022	Jul 31, 2021	Jul 25, 2020	Jul 27, 2019	Jul 28, 2018
Goodwill	38,535)	38,304)	38,168)	33,806)	33,529)	31,706)
Technology	2,998)	2,631)	3,629)	3,298)	3,270)	3,711)
Customer relationships	1,228)	1,354)	1,387)	760)	840)	1,538)
Other	40)	41)	71)	26)	41)	63)
Purchased intangible assets with finite lives, gross	4,266)	4,026)	5,087)	4,084)	4,151)	5,312)
Accumulated amortization	(2,618)	(1,887)	(1,973)	(2,721)	(2,286)	(2,863)
Purchased intangible assets with finite lives, net	1,648)	2,139)	3,114)	1,363)	1,865)	2,449)
In-process research and development, with indefinite lives	170)	430)	505)	213)	336)	103)
Purchased intangible assets	1,818)	2,569)	3,619)	1,576)	2,201)	2,552)
Goodwill and purchased intangible assets	40,353)	40,873)	41,787)	35,382)	35,730)	34,258)

Based on: 10-K (reporting date: 2023-07-29), 10-K (reporting date: 2022-07-30), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-25), 10-K (reporting date: 2019-07-27), 10-K (reporting date: 2018-07-28).

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Item	Description	The company
Goodwill	Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.	Cisco Systems Inc. goodwill increased from 2021 to 2022 and from 2022 to 2023.
Purchased intangible assets	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Cisco Systems Inc. purchased intangible assets decreased from 2021 to 2022 and from 2022 to 2023.
Goodwill and purchased intangible assets	Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Cisco Systems Inc. goodwill and purchased intangible assets decreased from 2021 to 2022 and from 2022 to 2023.

Cisco Systems Inc., adjustments to financial statements

US$ in millions

	Jul 29, 2023	Jul 30, 2022	Jul 31, 2021	Jul 25, 2020	Jul 27, 2019	Jul 28, 2018
Adjustment to Total Assets
Total assets (as reported)	101,852)	94,002)	97,497)	94,853)	97,793)	108,784)
Less: Goodwill	38,535)	38,304)	38,168)	33,806)	33,529)	31,706)
Total assets (adjusted)	63,317)	55,698)	59,329)	61,047)	64,264)	77,078)
Adjustment to Equity
Equity (as reported)	44,353)	39,773)	41,275)	37,920)	33,571)	43,204)
Less: Goodwill	38,535)	38,304)	38,168)	33,806)	33,529)	31,706)
Equity (adjusted)	5,818)	1,469)	3,107)	4,114)	42)	11,498)

Based on: 10-K (reporting date: 2023-07-29), 10-K (reporting date: 2022-07-30), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-25), 10-K (reporting date: 2019-07-27), 10-K (reporting date: 2018-07-28).

Cisco Systems Inc., Financial Data: Reported vs. Adjusted

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Cisco Systems Inc., adjusted financial ratios

	Jul 29, 2023	Jul 30, 2022	Jul 31, 2021	Jul 25, 2020	Jul 27, 2019	Jul 28, 2018
Total Asset Turnover
Reported total asset turnover	0.56	0.55	0.51	0.52	0.53	0.45
Adjusted total asset turnover	0.90	0.93	0.84	0.81	0.81	0.64
Financial Leverage
Reported financial leverage	2.30	2.36	2.36	2.50	2.91	2.52
Adjusted financial leverage	10.88	37.92	19.10	14.84	1,530.10	6.70
Return on Equity (ROE)
Reported ROE	28.44%	29.70%	25.66%	29.57%	34.62%	0.25%
Adjusted ROE	216.79%	804.08%	340.88%	272.58%	27,669.05%	0.96%
Return on Assets (ROA)
Reported ROA	12.38%	12.57%	10.86%	11.82%	11.88%	0.10%
Adjusted ROA	19.92%	21.21%	17.85%	18.37%	18.08%	0.14%

Based on: 10-K (reporting date: 2023-07-29), 10-K (reporting date: 2022-07-30), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-25), 10-K (reporting date: 2019-07-27), 10-K (reporting date: 2018-07-28).

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Cisco Systems Inc. adjusted total asset turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Cisco Systems Inc. adjusted financial leverage ratio increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Cisco Systems Inc. adjusted ROE improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Cisco Systems Inc. adjusted ROA improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.

Cisco Systems Inc., Financial Ratios: Reported vs. Adjusted

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	Jul 29, 2023	Jul 30, 2022	Jul 31, 2021	Jul 25, 2020	Jul 27, 2019	Jul 28, 2018
As Reported
Selected Financial Data (US$ in millions)
Revenue	56,998)	51,557)	49,818)	49,301)	51,904)	49,330)
Total assets	101,852)	94,002)	97,497)	94,853)	97,793)	108,784)
Activity Ratio
Total asset turnover¹	0.56	0.55	0.51	0.52	0.53	0.45
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Revenue	56,998)	51,557)	49,818)	49,301)	51,904)	49,330)
Adjusted total assets	63,317)	55,698)	59,329)	61,047)	64,264)	77,078)
Activity Ratio
Adjusted total asset turnover²	0.90	0.93	0.84	0.81	0.81	0.64

Based on: 10-K (reporting date: 2023-07-29), 10-K (reporting date: 2022-07-30), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-25), 10-K (reporting date: 2019-07-27), 10-K (reporting date: 2018-07-28).

2023 Calculations

¹ Total asset turnover = Revenue ÷ Total assets
= 56,998 ÷ 101,852 = 0.56

² Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 56,998 ÷ 63,317 = 0.90

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Cisco Systems Inc. adjusted total asset turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.

	Jul 29, 2023	Jul 30, 2022	Jul 31, 2021	Jul 25, 2020	Jul 27, 2019	Jul 28, 2018
As Reported
Selected Financial Data (US$ in millions)
Total assets	101,852)	94,002)	97,497)	94,853)	97,793)	108,784)
Equity	44,353)	39,773)	41,275)	37,920)	33,571)	43,204)
Solvency Ratio
Financial leverage¹	2.30	2.36	2.36	2.50	2.91	2.52
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets	63,317)	55,698)	59,329)	61,047)	64,264)	77,078)
Adjusted equity	5,818)	1,469)	3,107)	4,114)	42)	11,498)
Solvency Ratio
Adjusted financial leverage²	10.88	37.92	19.10	14.84	1,530.10	6.70

Based on: 10-K (reporting date: 2023-07-29), 10-K (reporting date: 2022-07-30), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-25), 10-K (reporting date: 2019-07-27), 10-K (reporting date: 2018-07-28).

2023 Calculations

¹ Financial leverage = Total assets ÷ Equity
= 101,852 ÷ 44,353 = 2.30

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted equity
= 63,317 ÷ 5,818 = 10.88

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Cisco Systems Inc. adjusted financial leverage ratio increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

	Jul 29, 2023	Jul 30, 2022	Jul 31, 2021	Jul 25, 2020	Jul 27, 2019	Jul 28, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	12,613)	11,812)	10,591)	11,214)	11,621)	110)
Equity	44,353)	39,773)	41,275)	37,920)	33,571)	43,204)
Profitability Ratio
ROE¹	28.44%	29.70%	25.66%	29.57%	34.62%	0.25%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income	12,613)	11,812)	10,591)	11,214)	11,621)	110)
Adjusted equity	5,818)	1,469)	3,107)	4,114)	42)	11,498)
Profitability Ratio
Adjusted ROE²	216.79%	804.08%	340.88%	272.58%	27,669.05%	0.96%

Based on: 10-K (reporting date: 2023-07-29), 10-K (reporting date: 2022-07-30), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-25), 10-K (reporting date: 2019-07-27), 10-K (reporting date: 2018-07-28).

2023 Calculations

¹ ROE = 100 × Net income ÷ Equity
= 100 × 12,613 ÷ 44,353 = 28.44%

² Adjusted ROE = 100 × Net income ÷ Adjusted equity
= 100 × 12,613 ÷ 5,818 = 216.79%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Cisco Systems Inc. adjusted ROE improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

	Jul 29, 2023	Jul 30, 2022	Jul 31, 2021	Jul 25, 2020	Jul 27, 2019	Jul 28, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	12,613)	11,812)	10,591)	11,214)	11,621)	110)
Total assets	101,852)	94,002)	97,497)	94,853)	97,793)	108,784)
Profitability Ratio
ROA¹	12.38%	12.57%	10.86%	11.82%	11.88%	0.10%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income	12,613)	11,812)	10,591)	11,214)	11,621)	110)
Adjusted total assets	63,317)	55,698)	59,329)	61,047)	64,264)	77,078)
Profitability Ratio
Adjusted ROA²	19.92%	21.21%	17.85%	18.37%	18.08%	0.14%

Based on: 10-K (reporting date: 2023-07-29), 10-K (reporting date: 2022-07-30), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-25), 10-K (reporting date: 2019-07-27), 10-K (reporting date: 2018-07-28).

2023 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 12,613 ÷ 101,852 = 12.38%

² Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 12,613 ÷ 63,317 = 19.92%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Cisco Systems Inc. adjusted ROA improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.

Cisco Systems Inc. (NASDAQ:CSCO)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

Cisco Systems Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Cisco Systems Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)