Stock Analysis on Net
Stock Analysis on Net

Cisco Systems Inc. (NASDAQ:CSCO)

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Analysis of Income Taxes

Microsoft Excel LibreOffice Calc

Income Tax Expense (Benefit)

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

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Jul 31, 2021 Jul 25, 2020 Jul 27, 2019 Jul 28, 2018 Jul 29, 2017 Jul 30, 2016
Federal
State
Foreign
Current
Federal
State
Foreign
Deferred
Provision for income taxes

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
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Cisco Systems Inc.’s current decreased from 2019 to 2020 but then increased from 2020 to 2021 not reaching 2019 level.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Cisco Systems Inc.’s deferred increased from 2019 to 2020 but then decreased significantly from 2020 to 2021.
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 2019 to 2020 and from 2020 to 2021.

Effective Income Tax Rate (EITR)

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

Microsoft Excel LibreOffice Calc
Jul 31, 2021 Jul 25, 2020 Jul 27, 2019 Jul 28, 2018 Jul 29, 2017 Jul 30, 2016
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: 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
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 increased from 2019 to 2020 and from 2020 to 2021.

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 31, 2021 Jul 25, 2020 Jul 27, 2019 Jul 28, 2018 Jul 29, 2017 Jul 30, 2016
Allowance for accounts receivable and returns
Sales-type and direct-financing leases
Inventory write-downs and capitalization
Deferred foreign income
Investment provisions
IPR&D and purchased intangible assets
Deferred revenue
Credits and net operating loss carryforwards
Share-based compensation expense
Accrued compensation
Lease liabilities
Capitalized research expenditures
Other
Gross deferred tax assets
Valuation allowance
Deferred tax assets
Goodwill and 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: 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
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 2019 to 2020 and from 2020 to 2021.
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 2019 to 2020 and from 2020 to 2021.
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) decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Deferred Tax Assets and Liabilities, Classification

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

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
Deferred tax assets
Deferred tax liabilities

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
Deferred tax assets 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 decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.
Deferred tax liabilities 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 decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Adjustments to Financial Statements: Removal of Deferred Taxes

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: Noncurrent deferred tax assets, net
Total assets (adjusted)
Adjustment to Total Liabilities
Total liabilities (as reported)
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: 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 Deferred Taxes (Summary)

Cisco Systems Inc., adjusted financial ratios

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Jul 31, 2021 Jul 25, 2020 Jul 27, 2019 Jul 28, 2018 Jul 29, 2017 Jul 30, 2016
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: 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 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 2019 to 2020 but then deteriorated significantly from 2020 to 2021.
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 and from 2020 to 2021.
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 and from 2020 to 2021.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Cisco Systems Inc.’s adjusted ROE deteriorated from 2019 to 2020 and from 2020 to 2021.
Adjusted ROA A profitability ratio calculated as adjusted 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 Net Profit Margin

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
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: 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 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 2019 to 2020 but then deteriorated significantly from 2020 to 2021.

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 Deferred Taxes
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 and from 2020 to 2021.

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 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: 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 and 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 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: 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 × 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 deteriorated from 2019 to 2020 and 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 Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted 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 × 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 2019 to 2020 but then deteriorated significantly from 2020 to 2021.