Cisco Systems Inc. (NASDAQ:CSCO)

Land, buildings, and building and leasehold improvements

The values show a slight downward trend initially from 4,545 million USD in 2019 to 4,252 million USD in 2020, followed by minor fluctuations and stabilization around 4,230-4,247 million USD by 2024. The overall change is relatively modest, indicating stability in this asset category over the period.

Production, engineering, computer and other equipment and related software

This category reveals a consistent decline from 6,633 million USD in 2019 to 5,160 million USD in 2024. The largest decrease occurs between 2021 and 2024, suggesting a reduction in investment or disposals in production and technological equipment assets.

Operating lease assets

There is a marked and steady decrease from 485 million USD in 2019 down to 115 million USD in 2024. This significant decline may reflect changes in lease agreements, possibly due to lease expirations or reclassification under accounting standards.

Furniture, fixtures and other

The value fluctuates slightly but remains relatively stable, with minor increases from 376 million USD in 2019 to 351 million USD in 2024, after some declines in the intervening years. The changes are small and indicate no major capital expenditure or disposals in this category.

Gross property and equipment

The total gross property and equipment decreases steadily from 12,039 million USD in 2019 to 9,873 million USD in 2024. This trend is primarily driven by reductions in production equipment and operating lease assets, partially offset by stability in land and building assets.

Accumulated depreciation and amortization

The accumulated depreciation shows a clear decreasing magnitude from -9,250 million USD in 2019 to -7,783 million USD in 2024. This reduction in accumulated depreciation aligns with the decline in gross property and equipment, suggesting asset disposals or lower additions reducing the accumulated base.

Property and equipment, net

Net property, plant, and equipment values exhibit a downward trend from 2,789 million USD in 2019 to 1,997 million USD in 2022, followed by a modest recovery and stabilization near 2,090 million USD in 2024. This pattern indicates an overall decrease in net asset base mid-period with some replenishment or revaluation in later years.

Average Age Ratio

The average age ratio shows a generally increasing trend from 76.83% in 2019 to a peak of 80.35% in 2022, followed by a slight decrease to 78.83% in 2024. This suggests that the property, plant, and equipment have been aging steadily over the observed period, with the assets being relatively mature and nearing the end of their useful lives.

Estimated Total Useful Life

The estimated total useful life of the assets demonstrates minor fluctuations, initially holding steady at 12 years in 2019 and 2020, then increasing to 14 years in 2021, dipping slightly to 13 years in 2022, and rising again to 14 years in both 2023 and 2024. This indicates periodic reassessments of asset longevity, reflecting possible changes in asset types, maintenance practices, or technological factors affecting expected usability.

Estimated Age, Time Elapsed Since Purchase

The estimated age of the assets increases from 9 years in 2019 to 11 years by 2021, remains constant in 2022, and stays at 11 years through 2024. The stagnation from 2021 onward suggests either a lack of significant new acquisitions or that newly acquired assets have similar age characteristics to existing assets, thus maintaining a stable average age.

Estimated Remaining Life

The estimated remaining life is relatively stable, fluctuating between 2 and 3 years across the entire period. The decrease to 2 years in 2022 indicates a temporary assessment that assets were closer to the end of their useful life that year, though it returned to 3 years subsequently, implying adjustments in either asset replacement strategies or useful life assessments.

Accumulated Depreciation and Amortization

The accumulated depreciation and amortization figures exhibit a downward trend over the analyzed period. Starting at 9,250 million US dollars in 2019, the value consistently declined each year, reaching 7,783 million US dollars in 2024. This steady decrease indicates ongoing depreciation expense and possibly a reduction in the historical cost base of depreciable assets or changes in depreciation methods or asset disposals.

Gross Property and Equipment

The gross property and equipment base decreased gradually from 12,039 million US dollars in 2019 to 9,873 million US dollars in 2024. The decline suggests limited new capital expenditures or asset sales, which could indicate a strategy of managing or downsizing the property and equipment assets. This reduction may also reflect a shift towards less capital-intensive operations or replacement of older assets being slower than depreciations.

Average Age Ratio

The average age ratio of property and equipment has shown a general upward trend, increasing from 76.83% in 2019 to a peak of 80.35% in 2022, followed by a slight decline to 78.83% by 2024. This ratio implies that the asset base is aging, with older assets representing a significant portion of total property and equipment. The minor decrease in the last two years could indicate some reinvestment or replacement of older assets, but the overall high percentage denotes a mature asset base.

Summary

Overall, the data suggests a company with an aging property and equipment base, experiencing steady depreciation and amortization expenses accompanied by a decrease in the gross value of assets. The modest fluctuations in the average age ratio indicate limited asset renewal activities. These trends could have implications for future capital expenditure planning, asset efficiency, and maintenance costs.

Gross Property and Equipment

The gross value of property and equipment shows a consistent downward trend over the six-year period. Starting at $12,039 million in 2019, the value decreases steadily each year, reaching $9,873 million by 2024. This represents a reduction of approximately 18% over the timeframe, indicating either asset disposals, reduced investment in new assets, or a combination of both.

Depreciation and Amortization Expenses

Depreciation and amortization expenses on property and equipment also exhibit a declining trajectory, falling from $1,000 million in 2019 to $700 million by 2024. The expense decreases more sharply between 2019 and 2021, then stabilizes at $700 million for the last two years. This reduction may reflect the aging asset base and the corresponding lower depreciation charges as assets reach the end of their useful lives or reduced additions of depreciable assets.

Estimated Total Useful Life

The estimated useful life of the property and equipment fluctuates slightly across the years, beginning at 12 years in 2019 and 2020, increasing to 14 years in 2021, decreasing marginally to 13 years in 2022, and then stabilizing at 14 years in 2023 and 2024. These changes may suggest adjustments in asset valuation methodology or reflect updates in the expected longevity of the assets.

In summary, the data reveals a contraction in the gross value of property and equipment alongside a reduction in related depreciation expenses, indicating a possible shrinkage or aging in the asset base. The relatively stable, though slightly varying, estimated useful life suggests periodic reassessment of asset longevity assumptions. These trends warrant further investigation into the company's capital expenditure policies and asset management strategies.

Accumulated depreciation and amortization

The accumulated depreciation and amortization value declined gradually over the six-year period, decreasing from 9,250 million US dollars in mid-2019 to 7,783 million US dollars by mid-2024. This represents a reduction of approximately 15.9% over the period, indicating a consistent unwinding of previously capitalized costs.

Depreciation and amortization expenses for property and equipment

The depreciation and amortization expenses showed a clear downward trend. Starting at 1,000 million US dollars in 2019, the expense decreased steadily to 700 million US dollars by 2023 and remained constant at that level in 2024. This decrease suggests a reduction in the chargeable depreciation expense related to property and equipment over these years.

Time elapsed since purchase

The average time elapsed since purchase generally increased from 9 years in 2019 to 11 years in 2024, with some minor fluctuations. This trend may reflect aging assets within the property and equipment portfolio, possibly indicating a longer retention period for assets or slower asset turnover.

Overall observations

The data reveals a consistent decrease in both accumulated depreciation and yearly depreciation expenses, which may be attributed to the aging asset base and possible changes in asset acquisition or disposal policies. The increase in the age of assets aligns with the observed decline in depreciation expenses, suggesting fewer new acquisitions or extended usage periods of existing assets. This pattern could impact future capital expenditure and maintenance strategies within the firm.

Property and Equipment, Net

The net value of property and equipment shows a general downward trend from 2019 to 2022, declining from $2,789 million to $1,997 million. This suggests a consistent decrease in the book value of these assets over this period. In 2023 and 2024, there is a slight recovery and stabilization, with values increasing to $2,085 million and $2,090 million respectively, indicating some renewal or acquisition activity offsetting prior declines.

Depreciation and Amortization Expenses for Property and Equipment

These expenses consistently decrease over the six-year period, starting at $1,000 million in 2019 and declining steadily to $700 million by 2023 and remaining steady in 2024. The reduction in depreciation expenses aligns with the declining net book value of property and equipment, reflecting less capitalized asset base or assets approaching full depreciation.

Estimated Remaining Life

The estimated remaining life of the property and equipment remains relatively stable around 3 years for most years. The only exception is 2022, where it dips slightly to 2 years, potentially indicating that assets were aging or that the asset base composition temporarily shifted towards older equipment. This short-term decline is reversed in subsequent years, restoring the estimate to 3 years.

Summary

Overall, the data indicates a reduction in the net book value of property and equipment over the initial three years, accompanied by a corresponding reduction in depreciation expense. The brief decrease in the estimated remaining life in 2022 suggests a period of aging assets. However, from 2023 onward, the stabilization of net asset values and remaining life estimates implies renewed investment or upgrading of property and equipment. The consistent decrease in depreciation expenses may also reflect changes in capital expenditure patterns or asset disposals in earlier periods.