Cisco Systems Inc. (NASDAQ:CSCO)

The financial data reveals trends in the current assets and adjusted current assets over the six-year period ending July 27, 2024.

Current Assets

The current assets exhibit a declining trend from 47,755 million US dollars in 2019 to a low point of 36,717 million in 2022. This represents a reduction over three consecutive years. A notable recovery occurs in 2023, with current assets increasing to 43,348 million, followed by a subsequent decline to 36,862 million in 2024. Overall, the level of current assets at the end of the period (2024) is marginally lower than the mid-cycle low observed in 2022.

Adjusted Current Assets

The adjusted current assets follow a parallel trajectory to the current assets, starting at 47,891 million in 2019 and decreasing steadily to 36,800 million in 2022. Similar to current assets, another rise to 43,433 million is observed in 2023, before falling again to 36,949 million in 2024. The adjusted current assets values are consistently slightly higher than the unadjusted current assets, indicating minor adjustments accounted for in this metric.

In summary, both metrics indicate a general contraction in liquidity-related resources during the early years of the period, with a brief resurgence in 2023, followed by a renewed decrease in the final year. This pattern may suggest shifts in working capital management or operational factors influencing short-term asset holdings. The close alignment between current assets and adjusted current assets values reinforces the consistency of the adjustments applied.

The analysis of the annual financial data reveals several noteworthy trends regarding the company's asset base over the six-year period from 2019 to 2024.

Total Assets

The total assets exhibited a slight decline from 2019 to 2020, decreasing from 97,793 million US$ to 94,853 million US$. This downward trend continued marginally into 2022, reaching 94,002 million US$. However, starting in 2023, a significant reversal occurred with total assets increasing sharply to 101,852 million US$, followed by a more pronounced rise to 124,413 million US$ in 2024. Overall, the total assets demonstrate initial contraction amid subsequent robust growth towards the end of the period.

Adjusted Total Assets

The adjusted total assets mirrored the general trend of total assets but remained consistently lower in value. From 94,959 million US$ in 2019, adjusted total assets declined steadily year-over-year through 2022, reaching a low of 89,636 million US$. In 2023, an upward trajectory commenced, with adjusted total assets rising to 95,361 million US$ and then surging markedly to 118,238 million US$ by 2024. This pattern suggests similar cyclical fluctuations to total assets, with a pronounced recovery and growth phase in the later years under review.

Comparative Insights

Both total and adjusted total assets reflect a contraction phase during the early years (2019-2022) followed by a recovery and expansion phase (2023-2024). The accelerated growth in 2023 and 2024 could indicate strategic asset acquisitions, capital investments, or other balance sheet strengthening activities. The gap between total and adjusted total assets persists throughout the period but widens in the last year, suggesting changes in asset adjustments or reclassifications becoming more impactful towards 2024.

The data reveals notable fluctuations in both current liabilities and adjusted current liabilities over the six-year period. There is a general pattern of decline in these liabilities from fiscal year 2019 through fiscal year 2022, followed by an increase in the succeeding years.

Current liabilities

The value decreased considerably from 31,712 million USD in 2019 to 25,331 million USD in 2020. This downward trend continued in 2021 (26,257 million USD) and 2022 (25,640 million USD), indicating an improvement in short-term obligations. However, a reversal occurred in 2023, with current liabilities rising sharply to 31,309 million USD, and this upward momentum accelerated further to 40,584 million USD in 2024. The increase in the last two years warrants attention as it may impact liquidity.

Adjusted current liabilities

Adjusted current liabilities exhibited a similar declining trend from 21,044 million USD in 2019 to 12,856 million USD in 2022, suggesting effective management of operational liabilities after adjustments. Following this period of reduction, a noticeable increase was observed in 2023 (17,401 million USD) and continued growth in 2024 (24,335 million USD). This pattern aligns with the increase in total current liabilities, which may highlight changes in short-term financing or operational strategy affecting the adjusted figures.

Overall, the data reflects a period of deleveraging through 2022, potentially signaling improved liquidity or a strategic reduction in liabilities. The subsequent increase in both current and adjusted current liabilities over the last two years indicates a shift that could affect the company’s short-term financial stability and calls for further investigation into underlying causes, such as increased borrowing, changes in working capital management, or other operational factors.

Total liabilities

The total liabilities show a declining trend from 64,222 million US dollars in July 2019 to 54,229 million in July 2022. However, this downward movement reverses in the following years, increasing to 57,499 million in July 2023 and then sharply rising to 78,956 million in July 2024. This pattern indicates a period of liability reduction followed by a significant increase.

Adjusted total liabilities

Adjusted total liabilities decrease steadily from 46,380 million US dollars in July 2019 to 30,568 million in July 2022. After this point, a mild increase is observed, reaching 31,345 million in July 2023, and subsequently experiencing a more pronounced rise to 49,769 million in July 2024. This overall trend shows a substantial reduction over the first few years, followed by notable growth in the last period.

Comparative observations

Both total and adjusted total liabilities demonstrate a general declining trend over the initial periods until mid-2022. The adjusted total liabilities exhibit a sharper and more consistent decrease compared to total liabilities. The reversal in the trend from 2023 onwards, especially the sharp rise in 2024, could suggest changes in financial strategy, increased borrowing, or reclassification of liabilities. The jump in total liabilities in 2024 is particularly significant and exceeds the level seen in 2019, reflecting increased financial obligations or commitments in the most recent year.

Equity Trends

The equity value demonstrated a generally upward trend over the six-year period from 2019 to 2024. Starting at 33,571 million US dollars in 2019, equity increased steadily, peaking at 44,353 million US dollars in 2023 before experiencing a modest rise to 45,457 million US dollars in 2024.

Adjusted Equity Trends

Adjusted equity also followed a consistent upward trajectory, beginning at 48,579 million US dollars in 2019 and climbing each year to reach 68,469 million US dollars in 2024. Notably, the adjusted equity figures remain significantly higher than the reported equity values throughout the period.

Comparative Insights

Both equity and adjusted equity show strong growth patterns, indicating an overall enhancement in the company's net value and potentially reflecting retained earnings, capital injections, or revaluation adjustments. The wider gap between adjusted equity and equity implies that adjustments—possibly for intangible assets, reserves, or other financial considerations—play a substantial role in the company's reported equity position.

Summary Observation

The data suggests financial strength and stability with continued growth in both equity measures. The steady rise in adjusted equity, alongside the more moderate increase in reported equity, highlights a comprehensive improvement in the company's financial base over the observed timeframe.

The annual financial data reveals significant fluctuations and overall trends in debt, equity, and capital over the six-year period analyzed. Several key patterns emerge from the reported and adjusted figures.

Total Reported Debt

The total reported debt exhibited a general decline from 24,666 million US$ in 2019 to 8,391 million US$ in 2023, indicating a consistent reduction in debt levels over these years. However, a sharp increase is observed in 2024, with debt rising steeply to 30,962 million US$, suggesting a possible strategic shift or external financing event during the most recent year.

Equity

Equity demonstrated a steady upward trend from 33,571 million US$ in 2019 to 44,457 million US$ in 2024, indicating strengthening shareholder value and an accumulation of retained earnings or capital injections. This growth was relatively smooth with minor fluctuations, reaching a peak in 2024.

Total Reported Capital

Total reported capital, defined as the sum of debt and equity, followed a fluctuating pattern. It decreased from 58,237 million US$ in 2019 to a low of 49,288 million US$ in 2022, before recovering to 52,744 million US$ in 2023. A notable increase occurred in 2024, reaching 76,419 million US$. This increase strongly corresponds with the large rise in reported debt during the same period, highlighting leverage expansion.

Adjusted Total Debt

The adjusted total debt mirrored the declining trend of reported debt from 25,761 million US$ in 2019 to 9,411 million US$ in 2023, reinforcing the narrative of debt reduction over the medium term. The value then surged to 32,232 million US$ in 2024, which aligns with the rise in reported debt, indicating a sharp increase in leverage after years of reduction.

Adjusted Equity

Adjusted equity showed a consistent upward movement from 48,579 million US$ in 2019 to 68,469 million US$ in 2024. This growth signals sustained enhancement in the company’s net assets and overall financial stability, with no material setbacks observed throughout the period.

Adjusted Total Capital

The adjusted total capital decreased marginally from 74,340 million US$ in 2019 to 69,629 million US$ in 2022, followed by an increase to 73,427 million US$ in 2023 and a substantial rise to 100,701 million US$ in 2024. The significant increase in 2024 is primarily driven by the surge in adjusted debt, offsetting the steady growth in adjusted equity.

In summary, the financial position appeared to strengthen through increased equity consistently over the years, accompanied by a deliberate debt reduction strategy until 2023. The year 2024 marks a departure from this trend with a marked increase in debt and total capital, suggesting a renewed leverage strategy which may be aimed at financing growth opportunities or responding to other financial needs. The substantial rise in both reported and adjusted total capital and debt in 2024 is a key highlight that warrants further investigation to understand its drivers and implications for the company’s risk profile and capital structure moving forward.

The financial data for the period from July 27, 2019, to July 27, 2024, reveals some important trends in revenue and adjusted revenue.

Revenue

The revenue experienced fluctuations throughout the period. Starting at $51,904 million in 2019, it declined to $49,301 million in 2020, showing a contraction. The revenue then stabilized around $49,818 million in 2021 before increasing to $51,557 million in 2022. A peak is observed in 2023 with revenue reaching $56,998 million, followed by a slight decline to $53,803 million in 2024. Overall, there is an upward trend from the low in 2020 to 2024, although the last year shows a moderate decrease from the prior year.

Adjusted Revenue

The adjusted revenue shows a more consistent growth trajectory compared to the reported revenue. It begins at $50,686 million in 2019 and increases steadily each year up to $59,284 million in 2023. In 2024, adjusted revenue slightly decreases to $56,728 million. The adjusted revenue figures are generally higher than the reported revenue from 2020 onward, indicating probable adjustments that positively impact the reported values.

In summary, while reported revenue including some volatility and a decline in 2024, adjusted revenue suggests a steady growth trend over the analyzed period with just a minor setback in the most recent year. This pattern may reflect underlying operating performance improvements moderated by external factors affecting the reported revenue figures.

Net Income Trend

Net income showed fluctuations over the analyzed periods. Beginning at 11,621 million USD in July 2019, it slightly declined to 11,214 million USD in July 2020, followed by a further decrease to 10,591 million USD in July 2021. An upward trend was observed thereafter, with net income rising to 11,812 million USD in July 2022 and peaking at 12,613 million USD in July 2023. However, a noticeable decline occurred in July 2024, with net income falling to 10,320 million USD.

Adjusted Net Income Trend

Adjusted net income exhibited a somewhat different pattern compared to net income. Starting at 10,228 million USD in July 2019, it experienced a significant increase to 13,464 million USD in July 2020. This was followed by a decrease to 11,960 million USD in July 2021 and a further decline to 11,344 million USD in July 2022. Subsequently, adjusted net income rose again, reaching 13,064 million USD in July 2023, before decreasing marginally to 12,514 million USD in July 2024.

Comparative Analysis

While net income was higher than adjusted net income in the initial periods (2019 and 2020), adjusted net income surpassed net income beginning in July 2020 and maintained this position across subsequent years. This indicates that adjustments made to net income, potentially for non-recurring items or other factors, have a substantial impact on the reported profitability.

Summary

Overall, both net income and adjusted net income have exhibited cyclical tendencies with peaks around 2023 followed by declines in 2024. The divergence between net income and adjusted net income suggests variability in certain accounting or operational adjustments. Monitoring these trends is essential for understanding ongoing profitability and the effects of adjustment items on financial outcomes.