Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

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

US$ in millions

12 months ended:	Jul 29, 2023	Jul 30, 2022	Jul 31, 2021	Jul 25, 2020	Jul 27, 2019	Jul 28, 2018
Federal	3,754)	2,203)	1,959)	1,101)	1,760)	9,900)
State	623)	458)	513)	264)	302)	340)
Foreign	412)	313)	583)	1,429)	1,238)	1,789)
Current	4,789)	2,974)	3,055)	2,794)	3,300)	12,029)
Federal	(1,955)	(176)	(203)	(374)	(84)	1,156)
State	(175)	(156)	(46)	287)	(2)	(232)
Foreign	46)	23)	(135)	49)	(264)	(24)
Deferred	(2,084)	(309)	(384)	(38)	(350)	900)
Provision for income taxes	2,705)	2,665)	2,671)	2,756)	2,950)	12,929)

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
Current	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Cisco Systems Inc. current decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.
Deferred	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Cisco Systems Inc. deferred increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.
Provision for income taxes	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Cisco Systems Inc. provision for income taxes decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

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

	Jul 29, 2023	Jul 30, 2022	Jul 31, 2021	Jul 25, 2020	Jul 27, 2019	Jul 28, 2018
Federal statutory tax rate	21.00%	21.00%	21.00%	21.00%	21.00%	27.00%
State taxes, net of federal tax benefit	2.40%	1.70%	2.70%	3.50%	2.00%	0.60%
Foreign income at other than U.S. rates	-0.10%	0.80%	1.50%	-1.50%	-4.50%	-5.20%
Tax credits	-0.30%	-1.60%	-1.40%	-0.90%	-1.70%	-2.50%
Foreign-derived intangible income deduction	-5.80%	-3.90%	-4.20%	-2.60%	-1.30%	0.00%
Domestic manufacturing deduction	0.00%	0.00%	0.00%	0.00%	0.00%	-0.50%
Stock-based compensation	1.10%	0.30%	0.60%	-0.10%	-0.60%	-0.10%
Other, net	-0.60%	0.10%	-0.10%	0.30%	-0.80%	-0.20%
Effective income tax rate, before impact of the Tax Act	17.70%	18.40%	20.10%	19.70%	14.10%	19.10%
Impact of the Tax Act	0.00%	0.00%	0.00%	0.00%	6.10%	80.10%
Effective income tax rate	17.70%	18.40%	20.10%	19.70%	20.20%	99.20%

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
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. effective income tax rate, before impact of the Tax Act decreased from 2021 to 2022 and from 2022 to 2023.

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

US$ in millions

	Jul 29, 2023	Jul 30, 2022	Jul 31, 2021	Jul 25, 2020	Jul 27, 2019	Jul 28, 2018
Allowance for accounts receivable and returns	81)	90)	68)	110)	127)	285)
Sales-type and direct-financing leases	22)	29)	157)	179)	176)	171)
Inventory write-downs and capitalization	452)	430)	392)	350)	409)	289)
Deferred foreign income	218)	210)	164)	253)	—)	—)
Investment provisions	—)	—)	—)	—)	—)	54)
IPR&D and purchased intangible assets	1,082)	1,184)	1,195)	1,289)	1,427)	63)
Depreciation	16)	10)	—)	—)	—)	—)
Deferred revenue	1,801)	1,744)	1,526)	1,182)	1,150)	1,584)
Credits and net operating loss carryforwards	1,218)	1,336)	1,264)	1,105)	1,241)	1,087)
Share-based compensation expense	198)	138)	123)	135)	164)	190)
Accrued compensation	328)	333)	333)	353)	342)	370)
Lease liabilities	246)	248)	277)	240)	—)	—)
Capitalized research expenditures	2,042)	149)	303)	223)	—)	—)
Other	484)	439)	454)	348)	419)	408)
Gross deferred tax assets	8,188)	6,340)	6,256)	5,767)	5,455)	4,501)
Valuation allowance	(754)	(834)	(771)	(700)	(457)	(374)
Deferred tax assets	7,434)	5,506)	5,485)	5,067)	4,998)	4,127)
Goodwill and purchased intangible assets	(602)	(767)	(686)	(577)	(705)	(753)
Depreciation	—)	—)	(164)	(179)	(141)	(118)
Unrealized gains on investments	—)	(26)	(112)	(119)	(70)	(33)
ROU lease assets	(234)	(237)	(260)	(222)	—)	—)
Other	(84)	(82)	(37)	(61)	(112)	(145)
Deferred tax liabilities	(920)	(1,112)	(1,259)	(1,158)	(1,028)	(1,049)
Net deferred tax assets (liabilities)	6,514)	4,394)	4,226)	3,909)	3,970)	3,078)

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
Gross deferred tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Cisco Systems Inc. gross deferred tax assets increased from 2021 to 2022 and from 2022 to 2023.
Deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Cisco Systems Inc. deferred tax assets increased from 2021 to 2022 and from 2022 to 2023.
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. net deferred tax assets (liabilities) increased from 2021 to 2022 and from 2022 to 2023.

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

US$ in millions

		Jul 29, 2023	Jul 30, 2022	Jul 31, 2021	Jul 25, 2020	Jul 27, 2019	Jul 28, 2018
	Deferred tax assets	6,576)	4,449)	4,360)	3,990)	4,065)	3,219)
	Deferred tax liabilities	62)	55)	134)	81)	95)	141)

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
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. deferred tax assets increased from 2021 to 2022 and from 2022 to 2023.
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. deferred tax liabilities decreased from 2021 to 2022 but then slightly increased 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: Noncurrent deferred tax assets, net	6,576)	4,449)	4,360)	3,990)	4,065)	3,219)
Total assets (adjusted)	95,276)	89,553)	93,137)	90,863)	93,728)	105,565)
Adjustment to Total Liabilities
Total liabilities (as reported)	57,499)	54,229)	56,222)	56,933)	64,222)	65,580)
Less: Noncurrent deferred tax liabilities, net	62)	55)	134)	81)	95)	141)
Total liabilities (adjusted)	57,437)	54,174)	56,088)	56,852)	64,127)	65,439)
Adjustment to Equity
Equity (as reported)	44,353)	39,773)	41,275)	37,920)	33,571)	43,204)
Less: Net deferred tax assets (liabilities)	6,514)	4,394)	4,226)	3,909)	3,970)	3,078)
Equity (adjusted)	37,839)	35,379)	37,049)	34,011)	29,601)	40,126)
Adjustment to Net Income
Net income (as reported)	12,613)	11,812)	10,591)	11,214)	11,621)	110)
Add: Deferred income tax expense (benefit)	(2,084)	(309)	(384)	(38)	(350)	900)
Net income (adjusted)	10,529)	11,503)	10,207)	11,176)	11,271)	1,010)

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
Net Profit Margin
Reported net profit margin	22.13%	22.91%	21.26%	22.75%	22.39%	0.22%
Adjusted net profit margin	18.47%	22.31%	20.49%	22.67%	21.72%	2.05%
Total Asset Turnover
Reported total asset turnover	0.56	0.55	0.51	0.52	0.53	0.45
Adjusted total asset turnover	0.60	0.58	0.53	0.54	0.55	0.47
Financial Leverage
Reported financial leverage	2.30	2.36	2.36	2.50	2.91	2.52
Adjusted financial leverage	2.52	2.53	2.51	2.67	3.17	2.63
Return on Equity (ROE)
Reported ROE	28.44%	29.70%	25.66%	29.57%	34.62%	0.25%
Adjusted ROE	27.83%	32.51%	27.55%	32.86%	38.08%	2.52%
Return on Assets (ROA)
Reported ROA	12.38%	12.57%	10.86%	11.82%	11.88%	0.10%
Adjusted ROA	11.05%	12.84%	10.96%	12.30%	12.03%	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).

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. adjusted net profit margin ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
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 and 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 slightly decreased from 2022 to 2023 not reaching 2021 level.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Cisco Systems Inc. adjusted ROE improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.
Adjusted ROA	A profitability ratio calculated as adjusted 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 not reaching 2021 level.

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)
Net income	12,613)	11,812)	10,591)	11,214)	11,621)	110)
Revenue	56,998)	51,557)	49,818)	49,301)	51,904)	49,330)
Profitability Ratio
Net profit margin¹	22.13%	22.91%	21.26%	22.75%	22.39%	0.22%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income	10,529)	11,503)	10,207)	11,176)	11,271)	1,010)
Revenue	56,998)	51,557)	49,818)	49,301)	51,904)	49,330)
Profitability Ratio
Adjusted net profit margin²	18.47%	22.31%	20.49%	22.67%	21.72%	2.05%

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 Net profit margin = 100 × Net income ÷ Revenue
= 100 × 12,613 ÷ 56,998 = 22.13%

² Adjusted net profit margin = 100 × Adjusted net income ÷ Revenue
= 100 × 10,529 ÷ 56,998 = 18.47%

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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. adjusted net profit margin ratio 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)
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 Deferred Taxes
Selected Financial Data (US$ in millions)
Revenue	56,998)	51,557)	49,818)	49,301)	51,904)	49,330)
Adjusted total assets	95,276)	89,553)	93,137)	90,863)	93,728)	105,565)
Activity Ratio
Adjusted total asset turnover²	0.60	0.58	0.53	0.54	0.55	0.47

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 ÷ 95,276 = 0.60

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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 and 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 Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets	95,276)	89,553)	93,137)	90,863)	93,728)	105,565)
Adjusted equity	37,839)	35,379)	37,049)	34,011)	29,601)	40,126)
Solvency Ratio
Adjusted financial leverage²	2.52	2.53	2.51	2.67	3.17	2.63

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
= 95,276 ÷ 37,839 = 2.52

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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 slightly decreased from 2022 to 2023 not reaching 2021 level.

	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 Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income	10,529)	11,503)	10,207)	11,176)	11,271)	1,010)
Adjusted equity	37,839)	35,379)	37,049)	34,011)	29,601)	40,126)
Profitability Ratio
Adjusted ROE²	27.83%	32.51%	27.55%	32.86%	38.08%	2.52%

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 × Adjusted net income ÷ Adjusted equity
= 100 × 10,529 ÷ 37,839 = 27.83%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Cisco Systems Inc. adjusted ROE improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

	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 Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income	10,529)	11,503)	10,207)	11,176)	11,271)	1,010)
Adjusted total assets	95,276)	89,553)	93,137)	90,863)	93,728)	105,565)
Profitability Ratio
Adjusted ROA²	11.05%	12.84%	10.96%	12.30%	12.03%	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 ROA = 100 × Net income ÷ Total assets
= 100 × 12,613 ÷ 101,852 = 12.38%

² Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 10,529 ÷ 95,276 = 11.05%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted 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 not reaching 2021 level.

Cisco Systems Inc. (NASDAQ:CSCO)

Analysis of Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

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

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

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

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)