Cisco Systems Inc. (NASDAQ:CSCO)

Current Ratio Trend

The current ratio exhibits a generally declining trend over the analyzed periods. Starting from a peak near 1.62 in late 2021, it gradually decreases to below 1.0 by early 2024 and remains below that threshold in subsequent quarters. This decreasing trend suggests a reduction in current assets relative to current liabilities, potentially indicating weakening short-term liquidity.

Quick Ratio Trend

The quick ratio also shows a downward trend throughout the time frame. Initially close to 1.46 in early 2021, the ratio decreases steadily, dropping below 1.0 between 2023 and 2024. The decline in quick assets relative to current liabilities implies a diminishing ability to cover short-term obligations without relying on inventory, reflecting a tightening liquidity position.

Cash Ratio Trend

The cash ratio demonstrates a pronounced decrease over time. It starts at around 1.11 in late 2020 and falls sharply to approximately 0.44–0.47 from early 2024 onward. This significant decline indicates that the company holds less cash and cash equivalents relative to its current liabilities, which may point to reduced immediate financial flexibility.

Overall Liquidity Insights

All three key liquidity ratios—current, quick, and cash ratios—reveal a consistent decline over the reported periods. This pattern reflects a gradual erosion of the company's liquidity buffer. By early 2024, the firm’s liquidity measures fall below conventional benchmarks (ratios below 1), signaling increased reliance on less liquid assets or potential challenges in meeting short-term obligations promptly. Stakeholders may interpret these trends as a need for closer monitoring of working capital management and liquidity risk.

The analysis of the quarterly financial data reveals notable trends in liquidity metrics over the periods observed.

Current Assets

Current assets exhibited fluctuations throughout the timeline, with values generally ranging between approximately $32,800 million and $43,900 million. The initial quarters show a relatively stable trend around the $37,000 to $44,000 million range. A decline is observed starting around October 2023, with current assets decreasing and reaching lower levels near $32,800 million by October 2025. Despite some short-term recoveries, the overall direction in the latter part of the series suggests a downward movement in current assets.

Current Liabilities

Current liabilities demonstrated variable behavior with initial values near $27,000 million, followed by some reductions and increases over time. After peaking at over $40,000 million around early 2024, liabilities remain elevated compared to earlier periods, fluctuating between approximately $34,000 million and $40,500 million in the most recent periods. This persistence of higher current liabilities contrasts with the somewhat declining trend in current assets.

Current Ratio

The current ratio, an indicator of short-term liquidity, starts above 1.5, reflecting a comfortable margin of current assets over current liabilities in the early quarters. However, a gradual decline is observed, with the ratio dropping steadily and falling below 1.0 starting in October 2023. This indicates that current liabilities exceed current assets during several consecutive periods, raising potential concerns about liquidity and the ability to cover short-term obligations. The ratio remains below or near 1.0 through the end of the data set, implying a tighter liquidity position.

In summary, the financial data reveals a deteriorating liquidity position over time, driven by a decline in current assets and a concurrent increase in current liabilities. The persistent decline in the current ratio, falling below the critical threshold of 1.0 in recent quarters, suggests heightened short-term financial risk and a potential need for management attention to improve working capital and liquidity management.

Quick Assets

The total quick assets demonstrated a fluctuating trend over the observed periods. Initially, the quick assets were valued at approximately $39.1 billion in late 2020, followed by a decline reaching a low point around $23.6 billion by late 2025. There were intermittent periods of recovery, specifically notable around mid-2023, where quick assets rose to approximately $35.4 billion, before declining again. Overall, the trend is indicative of a gradual decrease in liquid asset levels over the analyzed timeframe.

Current Liabilities

Current liabilities showed an overall increasing trend, beginning at roughly $27.0 billion in late 2020 and rising to a peak value exceeding $40.5 billion in early to mid-2024. After reaching this peak, liabilities remained elevated, fluctuating slightly but generally sustaining levels above $34 billion through late 2025. This suggests a growing short-term obligation burden over the period.

Quick Ratio

The quick ratio reflected a diminishing liquidity position. Starting at a healthy 1.45 in late 2020, the ratio declined gradually but steadily, reaching roughly 1.1 by early 2023. A marked drop occurred after this point, with the ratio falling sharply below 1, hitting lows around 0.64 to 0.69 in the mid to late 2024 periods. Despite slight improvements toward late 2025, the ratio remained under 1, indicating that the company's quick assets were insufficient to cover current liabilities without relying on inventory or longer-term assets.

Overall Analysis

The data suggests that liquidity has tightened substantially from 2020 through 2025. While quick assets saw some intermittent recoveries, overall they declined, contrasting with steadily increasing current liabilities. This dynamic has eroded the quick ratio below the critical threshold of 1, signaling potential short-term liquidity risks. The company may need to focus on strengthening its liquid asset base or managing current liabilities more effectively to improve financial stability.

The analysis of the recent quarterly financial data reveals notable trends in liquidity and balance sheet management. Over the observed periods, total cash assets exhibited fluctuations with an overall declining trajectory from the initial peak levels. After starting at approximately $30 billion, cash assets dropped consistently during several quarters, with some recoveries in the middle intervals, but a marked decline is evident in the latest periods, reaching below $16 billion near the end of the timeline.

Current liabilities, on the other hand, showed a varying pattern with subtle oscillations. Initially, current liabilities remained close to the total cash assets level. However, towards the later periods, there was a significant increase, hitting a peak of over $40 billion at one point. Although a slight reduction happened afterwards, liabilities remained substantially higher compared to the initial quarters, indicating a potential increase in short-term obligations or operational financing needs.

The cash ratio, which measures the ability to cover current liabilities with cash and cash equivalents, reflects the company’s liquidity position and its short-term financial health. The ratio began above 1.0, suggesting strong liquidity. Nevertheless, this metric decreased steadily across the periods, dropping below 0.5 in the most recent quarters. This decline indicates that cash assets are less sufficient to cover current liabilities than in previous years, potentially signaling increased risk or tighter liquidity conditions.

Overall, the data highlights a concerning downward trend in liquidity as cash reserves diminish while current liabilities tend to rise. The cash ratio's decline underlines a weakening in covering short-term obligations purely from cash assets, which could warrant closer attention to cash flow management and liability structuring going forward.

Total Cash Assets

Started high near $30 billion, saw intermittent declines and recoveries, but overall a clear reduction trend ending below $16 billion, indicating decreased liquid resources over time.

Current Liabilities

Showed fluctuations but generally remained high, peaking above $40 billion at times toward the latest periods, highlighting potentially increased short-term debts or operational leverage.

Cash Ratio

Initially above 1, implying ample liquidity, it steadily reduced to below 0.5 in the latest quarters, suggesting declining ability to cover liabilities with cash.