Stock Analysis on Net
Stock Analysis on Net

Cisco Systems Inc. (NASDAQ:CSCO)

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Analysis of Goodwill and Intangible Assets

Microsoft Excel LibreOffice Calc

Goodwill and Intangible Asset Disclosure

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

US$ in millions

Microsoft Excel LibreOffice Calc
Jul 31, 2021 Jul 25, 2020 Jul 27, 2019 Jul 28, 2018 Jul 29, 2017 Jul 30, 2016
Goodwill
Technology
Customer relationships
Other
Purchased intangible assets with finite lives, gross
Accumulated amortization
Purchased intangible assets with finite lives, net
In-process research and development, with indefinite lives
Purchased intangible assets
Goodwill and purchased intangible assets

Based on: 10-K (filing date: 2021-09-09), 10-K (filing date: 2020-09-03), 10-K (filing date: 2019-09-05), 10-K (filing date: 2018-09-06), 10-K (filing date: 2017-09-07), 10-K (filing date: 2016-09-08).

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.’s goodwill increased from 2019 to 2020 and from 2020 to 2021.
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.’s purchased intangible assets decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.
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.’s goodwill and purchased intangible assets decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Adjustments to Financial Statements: Removal of Goodwill

Cisco Systems Inc., adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
Jul 31, 2021 Jul 25, 2020 Jul 27, 2019 Jul 28, 2018 Jul 29, 2017 Jul 30, 2016
Adjustment to Total Assets
Total assets (as reported)
Less: Goodwill
Total assets (adjusted)
Adjustment to Total Cisco Shareholders’ Equity
Total Cisco shareholders’ equity (as reported)
Less: Goodwill
Total Cisco shareholders’ equity (adjusted)

Based on: 10-K (filing date: 2021-09-09), 10-K (filing date: 2020-09-03), 10-K (filing date: 2019-09-05), 10-K (filing date: 2018-09-06), 10-K (filing date: 2017-09-07), 10-K (filing date: 2016-09-08).


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


Adjusted Financial Ratios: Removal of Goodwill (Summary)

Cisco Systems Inc., adjusted financial ratios

Microsoft Excel LibreOffice Calc
Jul 31, 2021 Jul 25, 2020 Jul 27, 2019 Jul 28, 2018 Jul 29, 2017 Jul 30, 2016
Total Asset Turnover
Reported total asset turnover
Adjusted total asset turnover
Financial Leverage
Reported financial leverage
Adjusted financial leverage
Return on Equity (ROE)
Reported ROE
Adjusted ROE
Return on Assets (ROA)
Reported ROA
Adjusted ROA

Based on: 10-K (filing date: 2021-09-09), 10-K (filing date: 2020-09-03), 10-K (filing date: 2019-09-05), 10-K (filing date: 2018-09-06), 10-K (filing date: 2017-09-07), 10-K (filing date: 2016-09-08).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Cisco Systems Inc.’s adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.
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.’s adjusted financial leverage ratio decreased from 2019 to 2020 but then slightly increased from 2020 to 2021.
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Cisco Systems Inc.’s adjusted ROE deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Cisco Systems Inc.’s adjusted ROA improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.

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


Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Jul 31, 2021 Jul 25, 2020 Jul 27, 2019 Jul 28, 2018 Jul 29, 2017 Jul 30, 2016
As Reported
Selected Financial Data (US$ in millions)
Revenue
Total assets
Activity Ratio
Total asset turnover1
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Revenue
Adjusted total assets
Activity Ratio
Adjusted total asset turnover2

Based on: 10-K (filing date: 2021-09-09), 10-K (filing date: 2020-09-03), 10-K (filing date: 2019-09-05), 10-K (filing date: 2018-09-06), 10-K (filing date: 2017-09-07), 10-K (filing date: 2016-09-08).

2021 Calculations

1 Total asset turnover = Revenue ÷ Total assets
= ÷ =

2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= ÷ =

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Cisco Systems Inc.’s adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Jul 31, 2021 Jul 25, 2020 Jul 27, 2019 Jul 28, 2018 Jul 29, 2017 Jul 30, 2016
As Reported
Selected Financial Data (US$ in millions)
Total assets
Total Cisco shareholders’ equity
Solvency Ratio
Financial leverage1
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets
Adjusted total Cisco shareholders’ equity
Solvency Ratio
Adjusted financial leverage2

Based on: 10-K (filing date: 2021-09-09), 10-K (filing date: 2020-09-03), 10-K (filing date: 2019-09-05), 10-K (filing date: 2018-09-06), 10-K (filing date: 2017-09-07), 10-K (filing date: 2016-09-08).

2021 Calculations

1 Financial leverage = Total assets ÷ Total Cisco shareholders’ equity
= ÷ =

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Cisco shareholders’ equity
= ÷ =

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.’s adjusted financial leverage ratio decreased from 2019 to 2020 but then slightly increased from 2020 to 2021.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Jul 31, 2021 Jul 25, 2020 Jul 27, 2019 Jul 28, 2018 Jul 29, 2017 Jul 30, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income
Total Cisco shareholders’ equity
Profitability Ratio
ROE1
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income
Adjusted total Cisco shareholders’ equity
Profitability Ratio
Adjusted ROE2

Based on: 10-K (filing date: 2021-09-09), 10-K (filing date: 2020-09-03), 10-K (filing date: 2019-09-05), 10-K (filing date: 2018-09-06), 10-K (filing date: 2017-09-07), 10-K (filing date: 2016-09-08).

2021 Calculations

1 ROE = 100 × Net income ÷ Total Cisco shareholders’ equity
= 100 × ÷ =

2 Adjusted ROE = 100 × Net income ÷ Adjusted total Cisco shareholders’ equity
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Cisco Systems Inc.’s adjusted ROE deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Jul 31, 2021 Jul 25, 2020 Jul 27, 2019 Jul 28, 2018 Jul 29, 2017 Jul 30, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income
Total assets
Profitability Ratio
ROA1
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income
Adjusted total assets
Profitability Ratio
Adjusted ROA2

Based on: 10-K (filing date: 2021-09-09), 10-K (filing date: 2020-09-03), 10-K (filing date: 2019-09-05), 10-K (filing date: 2018-09-06), 10-K (filing date: 2017-09-07), 10-K (filing date: 2016-09-08).

2021 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =

2 Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Cisco Systems Inc.’s adjusted ROA improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.