Common-Size Income Statement
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- Balance Sheet: Assets
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Net Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Price to Operating Profit (P/OP) since 2005
- Aggregate Accruals
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Cisco Systems Inc., common-size consolidated income statement
Based on: 10-K (reporting date: 2024-07-27), 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).
- Revenue Composition
- Over the six-year period, the product segment consistently represented the majority of revenue, fluctuating between approximately 72.29% and 75.69%. The service segment complemented this, ranging from 24.31% to 27.71%. Notably, the product revenue proportion dipped in 2021 and rose again in 2023 but declined in 2024, while services showed a reverse trend, increasing in 2021 and 2024.
- Cost of Sales
- The cost of sales as a percentage of revenue decreased from 37.06% in 2019 to 35.27% in 2024, indicating an overall improvement in cost management or efficiency. Both product and service costs followed a similar downward trend, with product costs dropping from -28.64% to -26.65% and service costs fluctuating around the -8% range, ending at -8.62%.
- Gross Margin
- Gross margin remained relatively stable, hovering around 62% to 64%, with a noticeable increase to 64.73% in 2024. This stability suggests consistent profitability at the gross level, supported by improved cost control.
- Operating Expenses
- Operating expenses as a percentage of revenue exhibited a gradual increase overall. Research and development expenses rose from -12.67% to -14.84%, reflecting heightened investment in innovation or product development. Sales and marketing expenses decreased slightly until 2023 but increased again in 2024, reaching -19.26%, the highest within the period. General and administrative costs increased steadily from -3.52% to -5.23%, indicating growth in overhead or administrative functions.
- Amortization and Restructuring Charges
- The amortization of purchased intangible assets increased notably in 2024 to -1.3%, up from a low of -0.29%, suggesting recent acquisitions or intangible asset capitalization. Restructuring and other charges varied considerably, peaking at -1.78% in 2021, dropping almost to zero in 2022, then rising again to -1.47% in 2024, indicating episodic restructuring activities.
- Total Operating Expenses and Operating Income
- Overall operating expenses rose from -35.54% in 2019 to a peak of -42.09% in 2024, reflecting the combined growth in individual expense categories. Correspondingly, operating income declined from 27.39% to 22.64% over the same period, signaling compression of operational profitability.
- Interest and Other Income/Expense
- Interest income saw a decreasing trend until 2022 but recovered by 2024. Interest expense declined initially but increased nearly to 2019 levels by 2024, possibly suggesting changes in debt structure or interest rates. Other income (loss) displayed variability with no clear trend, ultimately resulting in a slight net loss impact in 2024. Overall, net interest and other income contributions decreased, diminishing from 0.68% in 2019 to 0.1% in 2024.
- Income Before Taxes and Net Income
- Income before provision for income taxes followed a declining trajectory from 28.07% in 2019 to 22.74% in 2024, mirroring decreases in operating income and changes in interest expense. Provision for income taxes as a percentage of revenue steadily decreased from -5.68% to -3.56%, which may point to tax efficiency improvements or changes in tax rates. Net income consequently declined from 22.39% to 19.18%, indicating reduced bottom-line profitability despite lower tax burdens.
- Summary of Trends
- The overall analysis reveals stable revenue distribution between products and services, improved cost of sales efficiency, and sustained gross margin percentage. However, increasing operating expenses, particularly in R&D, sales, general and administrative categories, coupled with rising amortization and restructuring charges, have exerted pressure on operating income and net profitability. Interest expense increases and volatile other income components further constrained income before taxes. The consistent reduction in tax provision partially offset profitability declines, but net income margins still narrowed over the six-year period.