Cisco Systems Inc. (NASDAQ:CSCO)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes shows a fluctuating pattern over the analyzed periods. Initially, there is a decline from 12,905 million USD in 2020 to 11,686 million USD in 2021. This is followed by a moderate recovery in 2022 and 2023, with values increasing to 12,468 million USD and 12,636 million USD respectively. However, from 2023 onwards, there is a downward trend, culminating in a significant reduction to 9,841 million USD by 2025. This indicates some pressure on operational profitability during the latter years.

Invested Capital

The invested capital demonstrates a generally increasing trend across the periods. It starts at 53,498 million USD in 2020 and rises steadily through 2021 to 2023, reaching approximately 58,979 million USD. There is then a marked increase in 2024 and 2025, nearly doubling to approximately 91,785 million USD and 91,789 million USD respectively. This sharp rise in invested capital in the later years implies significant capital allocation or investments made by the company during this time frame.

Return on Invested Capital (ROIC)

The return on invested capital experiences a downward trajectory over the years. Starting at a high of 24.12% in 2020, it declines sharply to 20.34% in 2021. Although it recovers slightly to 21.11% in 2022 and 21.42% in 2023, it then falls notably in 2024 and 2025 to 13.27% and 10.72% respectively. This decline in ROIC, especially prominent in the later years, suggests decreasing efficiency in generating returns from the increased invested capital, corroborating the insights gained from the net operating profit trend.

Operating Profit Margin (OPM)

The operating profit margin demonstrates a declining trend over the observed periods. Starting at 30.47% in July 2020, it decreased gradually to 21.16% by July 2025. The decline was steady, with a slight increase noted between 2021 and 2022, but overall the margin dropped by approximately 9 percentage points over five years, indicating reduced profitability from operations.

Turnover of Capital (TO)

Turnover of capital fluctuated within the timeframe. Initially, it declined from 0.96 in July 2020 to 0.89 in July 2022, followed by a notable increase to 1.01 in July 2023. After this peak, turnover sharply decreased to 0.62 in July 2024 and remained stable at that level through July 2025. This suggests a period of improving capital efficiency that was not sustained in the latter years.

Effective Cash Tax Rate (1 - CTR)

The effective cash tax rate, expressed as 1 minus the tax rate, shows some variability but generally fluctuated around the 70-80% range. It started at 82.6% in July 2020, decreased to a low of 72.94% in July 2023, then returned to around 81.66% by July 2025. These changes indicate some fluctuations in cash tax efficiency, but no consistent upward or downward trend.

Return on Invested Capital (ROIC)

Return on invested capital displayed a declining trend throughout the period. From a high of 24.12% in July 2020, ROIC decreased to 10.72% by July 2025, nearly halving over five years. Intermediate years showed some minor recovery, but the overall pattern highlights a reduction in the efficiency and profitability of invested capital.

The financial data demonstrates several notable trends in the company's performance across the periods examined.

Net Operating Profit Before Taxes (NOPBT)

The NOPBT fluctuated over the years, starting at 15,623 million USD in July 2020, experiencing a decrease to 14,696 million USD in July 2021, followed by a recovery to 15,421 million USD in July 2022. There was a significant increase in July 2023 reaching 17,324 million USD. However, this was followed by a decline in the subsequent years to 15,014 million USD in July 2024 and further down to 12,052 million USD in July 2025. This indicates a volatility in profitability before taxes with a peak in 2023 and weakening in the latest periods.

Adjusted Revenue

The adjusted revenue showed a gradually increasing trend from 51,280 million USD in July 2020 to 52,657 million USD in July 2022. A more pronounced rise occurred in July 2023, with revenue reaching 59,284 million USD. After that peak, revenue slightly decreased to 56,728 million USD in July 2024 and remained relatively stable at 56,958 million USD in July 2025. This suggests generally stable top-line growth with a plateau toward the most recent years.

Operating Profit Margin (OPM)

The operating profit margin exhibited a declining trajectory over the analyzed period. Starting at 30.47% in July 2020, the margin dropped to 28.52% in July 2021, then modestly increased to 29.29% in July 2022 before declining again to 29.22% in July 2023. From there, the margin experienced a notable decrease to 26.47% in July 2024 and further to 21.16% in July 2025. This continuous decline in operating profitability relative to revenue suggests rising costs or pricing pressures impacting operational efficiency.

Overall, while adjusted revenue showed a positive trend with some volatility, net operating profit before taxes and operating profit margins revealed increased fluctuation and a declining pattern, especially in recent years. This combination hints at challenges in cost management or competitive conditions adversely affecting profitability despite stable revenue levels.

Adjusted Revenue

The adjusted revenue shows a generally upward trend from 2020 to 2025, increasing from $51,280 million in 2020 to $56,958 million in 2025. There is a steady increase through 2023, peaking at $59,284 million, followed by a slight decline in 2024 to $56,728 million, and then a marginal increase again in 2025.

Invested Capital

The invested capital exhibits a consistent rise over the six-year period, starting at $53,498 million in 2020 and remaining relatively stable in the early years before experiencing a significant jump in 2024 and maintaining that higher level in 2025, reaching approximately $91,789 million. This indicates a substantial increase in the capital invested in the company during the later years.

Turnover of Capital (TO)

The turnover of capital ratio demonstrates a fluctuating pattern. Initially, it declines from 0.96 in 2020 to 0.89 in 2022, suggesting a decreasing efficiency in generating revenue from invested capital. Then, there is an improvement to 1.01 in 2023, indicating enhanced capital utilization. However, the ratio sharply declines to 0.62 in 2024 and remains at that level in 2025, reflecting a marked reduction in capital efficiency in the last two years compared to earlier periods.

Overall Analysis

The data reflects growth in revenue along with a significant increase in invested capital, especially from 2024 onwards. This large increase in invested capital accompanied by a decrease in turnover ratio indicates that the company's capital investment has outpaced revenue growth in the recent years, leading to lower efficiency in capital usage. The trend suggests a strategic phase of heavy investment that has yet to translate proportionally into revenue gains.

Cash Operating Taxes

The cash operating taxes showed a fluctuating pattern over the observed periods. Starting from $2,718 million in 2020, there was an increase to $3,009 million in 2021, followed by a slight decline to $2,953 million in 2022. A notable spike occurred in 2023, reaching $4,688 million, before decreasing significantly in subsequent years to $2,835 million in 2024 and further down to $2,211 million in 2025.

Net Operating Profit Before Taxes (NOPBT)

The net operating profit before taxes exhibited variability with an overall downward trend in recent years. It began at $15,623 million in 2020, decreased slightly to $14,696 million in 2021, then increased to $15,421 million in 2022. This was followed by a peak at $17,324 million in 2023, after which there was a sharp decline to $15,014 million in 2024 and a further decrease to $12,052 million in 2025.

Effective Cash Tax Rate (CTR)

The effective cash tax rate demonstrated considerable variation during the timeframe. It increased from 17.4% in 2020 to 20.48% in 2021, then slightly declined to 19.15% in 2022. In 2023, there was a significant rise to 27.06%, followed by a notable reduction to 18.88% in 2024 and a slight further decrease to 18.34% in 2025.

Summary Insights

The data indicates that the company experienced volatility in both profitability and tax-related metrics. The peak in net operating profit in 2023 coincides with the highest effective cash tax rate and cash operating taxes, suggesting increased taxable income or changes in tax policies during that period. The subsequent declines in profit and taxes in the following years may reflect a reduction in operational performance or more favorable tax conditions. The variability in the effective cash tax rate highlights fluctuations in the tax burden relative to operating profits over time.