Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Cisco Systems Inc. (NASDAQ:CSCO)

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Analysis of Income Taxes

Advanced level


Income Tax Expense (Benefit)

Cisco Systems Inc., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Jul 25, 2020 Jul 27, 2019 Jul 28, 2018 Jul 29, 2017 Jul 30, 2016 Jul 25, 2015
Federal
State
Foreign
Current
Federal
State
Foreign
Deferred
Provision for income taxes

Based on: 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), 10-K (filing date: 2015-09-08).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Cisco Systems Inc.’s current decreased from 2018 to 2019 and from 2019 to 2020.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Cisco Systems Inc.’s deferred decreased from 2018 to 2019 but then slightly increased from 2019 to 2020.
Provision for income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Cisco Systems Inc.’s provision for income taxes decreased from 2018 to 2019 and from 2019 to 2020.

Effective Income Tax Rate (EITR)

Cisco Systems Inc., effective income tax rate (EITR) reconciliation

Microsoft Excel LibreOffice Calc
Jul 25, 2020 Jul 27, 2019 Jul 28, 2018 Jul 29, 2017 Jul 30, 2016 Jul 25, 2015
Federal statutory tax rate
State taxes, net of federal tax benefit
Foreign income at other than U.S. rates
Tax credits
Foreign-derived intangible income deduction
Domestic manufacturing deduction
Stock-based compensation
Tax audit settlement
Other, net
Effective income tax rate, before impact of the Tax Act
Impact of the Tax Act
Effective income tax rate

Based on: 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), 10-K (filing date: 2015-09-08).

Item Description The company
Effective income tax rate, before impact of the Tax Act Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Cisco Systems Inc.’s effective income tax rate, before impact of the Tax Act decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.

Components of Deferred Tax Assets and Liabilities

Cisco Systems Inc., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel LibreOffice Calc
Jul 25, 2020 Jul 27, 2019 Jul 28, 2018 Jul 29, 2017 Jul 30, 2016 Jul 25, 2015
Allowance for doubtful accounts and returns
Sales-type and direct-financing leases
Inventory write-downs and capitalization
Deferred foreign income
Investment provisions
IPR&D, goodwill, and purchased intangible assets
Deferred revenue
Credits and net operating loss carryforwards
Share-based compensation expense
Accrued compensation
Lease liabilities
Other
Gross deferred tax assets
Valuation allowance
Deferred tax assets
Purchased intangible assets
Depreciation
Unrealized gains on investments
ROU lease assets
Other
Deferred tax liabilities
Net deferred tax assets (liabilities)

Based on: 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), 10-K (filing date: 2015-09-08).

Item Description The company
Gross deferred tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Cisco Systems Inc.’s gross deferred tax assets increased from 2018 to 2019 and from 2019 to 2020.
Deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Cisco Systems Inc.’s deferred tax assets increased from 2018 to 2019 and from 2019 to 2020.
Net deferred tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Cisco Systems Inc.’s net deferred tax assets (liabilities) increased from 2018 to 2019 but then slightly decreased from 2019 to 2020.

Deferred Tax Assets and Liabilities, Classification

Cisco Systems Inc., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel LibreOffice Calc
Jul 25, 2020 Jul 27, 2019 Jul 28, 2018 Jul 29, 2017 Jul 30, 2016 Jul 25, 2015
Deferred tax assets, current
Deferred tax liabilities, current
Deferred tax assets, noncurrent
Deferred tax liabilities, noncurrent

Based on: 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), 10-K (filing date: 2015-09-08).

Item Description The company
Deferred tax assets, noncurrent Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Cisco Systems Inc.’s deferred tax assets, noncurrent increased from 2018 to 2019 but then slightly decreased from 2019 to 2020.
Deferred tax liabilities, noncurrent Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Cisco Systems Inc.’s deferred tax liabilities, noncurrent decreased from 2018 to 2019 and from 2019 to 2020.

Adjustments to Financial Statements: Removal of Deferred Taxes

Cisco Systems Inc., adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
Jul 25, 2020 Jul 27, 2019 Jul 28, 2018 Jul 29, 2017 Jul 30, 2016 Jul 25, 2015
Adjustment to Current Assets
Current assets (as reported)
Less: Current deferred tax assets, net
Current assets (adjusted)
Adjustment to Total Assets
Total assets (as reported)
Less: Current deferred tax assets, net
Less: Noncurrent deferred tax assets, net
Total assets (adjusted)
Adjustment to Current Liabilities
Current liabilities (as reported)
Less: Current deferred tax liabilities, net
Current liabilities (adjusted)
Adjustment to Total Liabilities
Total liabilities (as reported)
Less: Current deferred tax liabilities, net
Less: Noncurrent deferred tax liabilities, net
Total liabilities (adjusted)
Adjustment to Total Cisco Shareholders’ Equity
Total Cisco shareholders’ equity (as reported)
Less: Net deferred tax assets (liabilities)
Total Cisco shareholders’ equity (adjusted)
Adjustment to Net Income
Net income (as reported)
Add: Deferred income tax expense (benefit)
Net income (adjusted)

Based on: 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), 10-K (filing date: 2015-09-08).


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


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Cisco Systems Inc., adjusted financial ratios

Microsoft Excel LibreOffice Calc
Jul 25, 2020 Jul 27, 2019 Jul 28, 2018 Jul 29, 2017 Jul 30, 2016 Jul 25, 2015
Current Ratio
Reported current ratio
Adjusted current ratio
Net Profit Margin
Reported net profit margin
Adjusted net profit margin
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: 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), 10-K (filing date: 2015-09-08).

Financial ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Cisco Systems Inc.’s adjusted current ratio deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020.
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Cisco Systems Inc.’s adjusted net profit margin ratio improved from 2018 to 2019 and from 2019 to 2020.
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 improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.
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 increased from 2018 to 2019 but then slightly decreased from 2019 to 2020 not reaching 2018 level.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Cisco Systems Inc.’s adjusted ROE improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Cisco Systems Inc.’s adjusted ROA improved from 2018 to 2019 and from 2019 to 2020.

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


Adjusted Current Ratio

Microsoft Excel LibreOffice Calc
Jul 25, 2020 Jul 27, 2019 Jul 28, 2018 Jul 29, 2017 Jul 30, 2016 Jul 25, 2015
As Reported
Selected Financial Data (US$ in millions)
Current assets
Current liabilities
Liquidity Ratio
Current ratio1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted current assets
Adjusted current liabilities
Liquidity Ratio
Adjusted current ratio2

Based on: 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), 10-K (filing date: 2015-09-08).

2020 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= ÷ =

2 Adjusted current ratio = Adjusted current assets ÷ Adjusted current liabilities
= ÷ =

Liquidity ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Cisco Systems Inc.’s adjusted current ratio deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020.

Adjusted Net Profit Margin

Microsoft Excel LibreOffice Calc
Jul 25, 2020 Jul 27, 2019 Jul 28, 2018 Jul 29, 2017 Jul 30, 2016 Jul 25, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income
Revenue
Profitability Ratio
Net profit margin1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income
Revenue
Profitability Ratio
Adjusted net profit margin2

Based on: 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), 10-K (filing date: 2015-09-08).

2020 Calculations

1 Net profit margin = 100 × Net income ÷ Revenue
= 100 × ÷ =

2 Adjusted net profit margin = 100 × Adjusted net income ÷ Revenue
= 100 × ÷ =

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Cisco Systems Inc.’s adjusted net profit margin ratio improved from 2018 to 2019 and from 2019 to 2020.

Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Jul 25, 2020 Jul 27, 2019 Jul 28, 2018 Jul 29, 2017 Jul 30, 2016 Jul 25, 2015
As Reported
Selected Financial Data (US$ in millions)
Revenue
Total assets
Activity Ratio
Total asset turnover1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Revenue
Adjusted total assets
Activity Ratio
Adjusted total asset turnover2

Based on: 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), 10-K (filing date: 2015-09-08).

2020 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 improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Jul 25, 2020 Jul 27, 2019 Jul 28, 2018 Jul 29, 2017 Jul 30, 2016 Jul 25, 2015
As Reported
Selected Financial Data (US$ in millions)
Total assets
Total Cisco shareholders’ equity
Solvency Ratio
Financial leverage1
Adjusted for Deferred Taxes
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: 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), 10-K (filing date: 2015-09-08).

2020 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 increased from 2018 to 2019 but then slightly decreased from 2019 to 2020 not reaching 2018 level.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Jul 25, 2020 Jul 27, 2019 Jul 28, 2018 Jul 29, 2017 Jul 30, 2016 Jul 25, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income
Total Cisco shareholders’ equity
Profitability Ratio
ROE1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income
Adjusted total Cisco shareholders’ equity
Profitability Ratio
Adjusted ROE2

Based on: 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), 10-K (filing date: 2015-09-08).

2020 Calculations

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

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

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Cisco Systems Inc.’s adjusted ROE improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Jul 25, 2020 Jul 27, 2019 Jul 28, 2018 Jul 29, 2017 Jul 30, 2016 Jul 25, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income
Total assets
Profitability Ratio
ROA1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income
Adjusted total assets
Profitability Ratio
Adjusted ROA2

Based on: 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), 10-K (filing date: 2015-09-08).

2020 Calculations

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

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

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Cisco Systems Inc.’s adjusted ROA improved from 2018 to 2019 and from 2019 to 2020.