Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Cisco Systems Inc., liquidity ratios
Based on: 10-K (reporting date: 2026-07-25), 10-K (reporting date: 2025-07-26), 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).
The liquidity profile demonstrates a sustained downward trajectory over the analyzed period, characterized by a significant contraction in the capacity to cover short-term obligations. A pronounced decline is evident across all metrics between the 2023 and 2024 fiscal year-ends, after which the ratios remain relatively suppressed.
- Current Ratio
- The current ratio exhibits a steady decrease from 1.49 in 2021 to 1.38 in 2023, followed by a sharp drop to 0.91 in 2024. Although a marginal recovery to 1.00 was observed in 2025, the ratio declined again to 0.93 by 2026. This progression indicates that current assets have fallen below the level of current liabilities, signaling a tightening of working capital.
- Quick Ratio
- A similar erosion is observed in the quick ratio, which fell from 1.32 in 2021 to 1.13 in 2023 before dropping sharply to 0.69 in 2024. The ratio concluded the period at 0.64 in 2026. This trend reflects a diminishing ability to meet immediate financial obligations without relying on the liquidation of inventory.
- Cash Ratio
- The cash ratio experienced a significant decline from 0.93 in 2021 to 0.44 in 2024, eventually reaching 0.38 by 2026. The substantial reduction in this metric highlights a decrease in the proportion of cash and cash equivalents held relative to total current liabilities.
The synchronized decline across these three metrics suggests a systemic shift in the balance sheet structure. Because the current, quick, and cash ratios all trended downward simultaneously, it can be inferred that the liquidity pressure is not isolated to inventory levels but is instead driven by a broader reduction in liquid assets or a significant increase in short-term liabilities.
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Current Ratio
Cisco Systems Inc., current ratio calculation, comparison to benchmarks
| Jul 25, 2026 | Jul 26, 2025 | Jul 27, 2024 | Jul 29, 2023 | Jul 30, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current assets | 38,665) | 34,986) | 36,862) | 43,348) | 36,717) | 39,112) | |
| Current liabilities | 41,525) | 35,064) | 40,584) | 31,309) | 25,640) | 26,257) | |
| Liquidity Ratio | |||||||
| Current ratio1 | 0.93 | 1.00 | 0.91 | 1.38 | 1.43 | 1.49 | |
| Benchmarks | |||||||
| Current Ratio, Competitors2 | |||||||
| Apple Inc. | — | 0.89 | 0.87 | 0.99 | 0.88 | 1.07 | |
| Arista Networks Inc. | — | 3.05 | 4.36 | 4.39 | 4.29 | 4.34 | |
| Dell Technologies Inc. | 0.91 | 0.78 | 0.74 | 0.82 | 0.80 | 0.80 | |
| Lumentum Holdings Inc. | 1.68 | 4.37 | 5.90 | 4.38 | 4.38 | 3.67 | |
| Super Micro Computer Inc. | 3.87 | 5.25 | 3.81 | 2.31 | 1.91 | 1.93 | |
| Current Ratio, Sector | |||||||
| Technology Hardware & Equipment | — | 0.98 | 0.92 | 1.05 | 0.96 | 1.09 | |
| Current Ratio, Industry | |||||||
| Information Technology | — | 1.39 | 1.24 | 1.41 | 1.37 | 1.55 | |
Based on: 10-K (reporting date: 2026-07-25), 10-K (reporting date: 2025-07-26), 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).
1 2026 Calculation
Current ratio = Current assets ÷ Current liabilities
= 38,665 ÷ 41,525 = 0.93
2 Click competitor name to see calculations.
The analysis of the liquidity position reveals a consistent decline in the short-term solvency margin over the observed period. The liquidity profile shifted from a state of healthy surplus, where current assets comfortably exceeded current liabilities, to a position where short-term obligations frequently meet or exceed available liquid assets.
- Current Ratio Trend
- A steady downward trajectory is observed between July 2021 and July 2024, with the ratio decreasing from 1.49 to 0.91. Despite a marginal recovery to 1.00 in July 2025, the ratio declined again to 0.93 by July 2026. This trend indicates a diminishing capacity to cover immediate liabilities using current assets, moving from a position of strength to one of tight liquidity.
- Asset and Liability Dynamics
- The erosion of the current ratio is largely attributed to the growth of current liabilities, which rose from 26,257 million in July 2021 to 41,525 million by July 2026. While current assets showed fluctuation—peaking at 43,348 million in July 2023—they failed to maintain a growth rate commensurate with the increase in liabilities. The most significant contraction occurred in July 2024, when current liabilities increased to 40,584 million while assets dropped to 36,862 million, resulting in the first instance of the ratio falling below the 1.0 threshold.
- Liquidity Risk Assessment
- The transition of the current ratio from a range of 1.38–1.49 (2021–2023) to a range of 0.91–1.00 (2024–2026) suggests an increase in short-term financial risk. The inability to maintain a ratio consistently above 1.0 in the latter years indicates that the organization is operating with minimal liquidity headroom, relying on more precise cash flow management to meet its maturing obligations.
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Quick Ratio
Cisco Systems Inc., quick ratio calculation, comparison to benchmarks
| Jul 25, 2026 | Jul 26, 2025 | Jul 27, 2024 | Jul 29, 2023 | Jul 30, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Cash and cash equivalents | 7,218) | 8,346) | 7,508) | 10,123) | 7,079) | 9,175) | |
| Investments | 8,700) | 7,764) | 10,346) | 16,023) | 12,188) | 15,343) | |
| Accounts receivable, net of allowance | 7,470) | 6,701) | 6,685) | 5,854) | 6,622) | 5,766) | |
| Financing receivables, net | 3,392) | 3,061) | 3,338) | 3,352) | 3,905) | 4,380) | |
| Total quick assets | 26,780) | 25,872) | 27,877) | 35,352) | 29,794) | 34,664) | |
| Current liabilities | 41,525) | 35,064) | 40,584) | 31,309) | 25,640) | 26,257) | |
| Liquidity Ratio | |||||||
| Quick ratio1 | 0.64 | 0.74 | 0.69 | 1.13 | 1.16 | 1.32 | |
| Benchmarks | |||||||
| Quick Ratio, Competitors2 | |||||||
| Apple Inc. | — | 0.77 | 0.75 | 0.84 | 0.71 | 0.91 | |
| Arista Networks Inc. | — | 2.35 | 3.46 | 3.16 | 3.05 | 3.54 | |
| Dell Technologies Inc. | 0.59 | 0.41 | 0.44 | 0.52 | 0.49 | 0.59 | |
| Lumentum Holdings Inc. | 1.31 | 2.87 | 4.02 | 3.57 | 3.92 | 3.25 | |
| Super Micro Computer Inc. | 1.93 | 3.21 | 1.88 | 1.16 | 0.75 | 0.72 | |
| Quick Ratio, Sector | |||||||
| Technology Hardware & Equipment | — | 0.76 | 0.72 | 0.84 | 0.73 | 0.90 | |
| Quick Ratio, Industry | |||||||
| Information Technology | — | 1.09 | 0.96 | 1.12 | 1.09 | 1.30 | |
Based on: 10-K (reporting date: 2026-07-25), 10-K (reporting date: 2025-07-26), 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).
1 2026 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 26,780 ÷ 41,525 = 0.64
2 Click competitor name to see calculations.
The liquidity position of the organization exhibits a significant downward trajectory over the six-year period ending July 2026. The quick ratio, which measures the ability to meet short-term obligations using only the most liquid assets, declined from 1.32 in July 2021 to 0.64 in July 2026. A critical shift in liquidity occurred between July 2023 and July 2024, where the ratio fell from 1.13 to 0.69, marking a transition from a position of surplus liquid assets to a potential liquidity deficit.
- Quick Ratio Trend
- For the first three years of the period, the quick ratio remained above 1.0, indicating that liquid assets were sufficient to cover current liabilities without relying on inventory sales. However, from July 2024 through July 2026, the ratio remained consistently below 1.0, suggesting an increased risk in meeting immediate financial obligations and a heightened dependence on cash flow from operations or external financing.
- Quick Assets Dynamics
- Total quick assets reached a peak of 35,352 million US$ in July 2023. Subsequently, a contraction is observed, with assets declining to 27,877 million US$ in July 2024 and ending the period at 26,780 million US$ in July 2026. This reduction in the liquid asset base has acted as a primary driver for the weakening liquidity ratios.
- Current Liabilities Growth
- Current liabilities remained relatively stable between 2021 and 2023, but experienced a sharp increase starting in July 2024, rising to 40,584 million US$. Despite a temporary decrease to 35,064 million US$ in July 2025, liabilities surged again to a period high of 41,525 million US$ by July 2026. The divergence between declining quick assets and rising current liabilities explains the accelerated deterioration of the quick ratio.
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Cash Ratio
Cisco Systems Inc., cash ratio calculation, comparison to benchmarks
| Jul 25, 2026 | Jul 26, 2025 | Jul 27, 2024 | Jul 29, 2023 | Jul 30, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Cash and cash equivalents | 7,218) | 8,346) | 7,508) | 10,123) | 7,079) | 9,175) | |
| Investments | 8,700) | 7,764) | 10,346) | 16,023) | 12,188) | 15,343) | |
| Total cash assets | 15,918) | 16,110) | 17,854) | 26,146) | 19,267) | 24,518) | |
| Current liabilities | 41,525) | 35,064) | 40,584) | 31,309) | 25,640) | 26,257) | |
| Liquidity Ratio | |||||||
| Cash ratio1 | 0.38 | 0.46 | 0.44 | 0.84 | 0.75 | 0.93 | |
| Benchmarks | |||||||
| Cash Ratio, Competitors2 | |||||||
| Apple Inc. | — | 0.33 | 0.37 | 0.42 | 0.31 | 0.50 | |
| Arista Networks Inc. | — | 2.00 | 3.04 | 2.62 | 2.34 | 3.07 | |
| Dell Technologies Inc. | 0.18 | 0.08 | 0.15 | 0.17 | 0.17 | 0.26 | |
| Lumentum Holdings Inc. | 1.10 | 2.23 | 3.29 | 3.18 | 3.56 | 2.93 | |
| Super Micro Computer Inc. | 1.06 | 2.21 | 0.71 | 0.32 | 0.18 | 0.24 | |
| Cash Ratio, Sector | |||||||
| Technology Hardware & Equipment | — | 0.36 | 0.37 | 0.45 | 0.35 | 0.51 | |
| Cash Ratio, Industry | |||||||
| Information Technology | — | 0.64 | 0.57 | 0.71 | 0.67 | 0.89 | |
Based on: 10-K (reporting date: 2026-07-25), 10-K (reporting date: 2025-07-26), 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).
1 2026 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 15,918 ÷ 41,525 = 0.38
2 Click competitor name to see calculations.
An analysis of the liquidity position reveals a consistent deterioration in the cash ratio over the observed period. The organization has experienced a simultaneous reduction in liquid assets and an increase in short-term obligations, leading to a weakened capacity to cover current liabilities using only cash and cash equivalents.
- Total Cash Assets Trend
- Cash assets exhibited volatility, reaching a peak of 26,146 million USD in 2023 before entering a steady decline to 15,918 million USD by 2026. This represents a significant reduction in immediate liquidity reserves compared to the 24,518 million USD held in 2021.
- Current Liabilities Growth
- Short-term obligations have increased substantially, rising from 26,257 million USD in 2021 to 41,525 million USD in 2026. The most pronounced increase occurred between 2023 and 2024, where liabilities grew from 31,309 million USD to 40,584 million USD.
- Cash Ratio Interpretation
- The cash ratio decreased from 0.93 in 2021 to 0.38 in 2026. While the ratio remained relatively stable through 2023, a sharp contraction occurred in 2024, dropping to 0.44. This trajectory indicates that the proportion of current liabilities that can be settled immediately with cash assets has declined from nearly full coverage to approximately 38% coverage.
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