Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Cisco Systems Inc., solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2026-01-24), 10-Q (reporting date: 2025-10-25), 10-K (reporting date: 2025-07-26), 10-Q (reporting date: 2025-04-26), 10-Q (reporting date: 2025-01-25), 10-Q (reporting date: 2024-10-26), 10-K (reporting date: 2024-07-27), 10-Q (reporting date: 2024-04-27), 10-Q (reporting date: 2024-01-27), 10-Q (reporting date: 2023-10-28), 10-K (reporting date: 2023-07-29), 10-Q (reporting date: 2023-04-29), 10-Q (reporting date: 2023-01-28), 10-Q (reporting date: 2022-10-29), 10-K (reporting date: 2022-07-30), 10-Q (reporting date: 2022-04-30), 10-Q (reporting date: 2022-01-29), 10-Q (reporting date: 2021-10-30), 10-K (reporting date: 2021-07-31), 10-Q (reporting date: 2021-05-01), 10-Q (reporting date: 2021-01-23), 10-Q (reporting date: 2020-10-24).
The solvency position, as indicated by the provided ratios, demonstrates a generally stable and strengthening financial structure for the initial period analyzed, followed by a notable shift in later quarters. Initially, the company exhibited decreasing leverage and consistent ability to cover interest expenses. However, a distinct change emerges in the latter half of the observed timeframe, characterized by increasing debt levels and a declining capacity to meet interest obligations.
- Debt to Equity
- The debt to equity ratio generally decreased from 0.38 in October 2020 to a low of 0.17 in October 2023, indicating a decreasing reliance on debt financing relative to equity. However, this trend reversed sharply, increasing to 0.63 by October 2025, suggesting a significant increase in debt compared to equity. The ratio continues to fluctuate, ending at 0.63 in October 2025 and 0.60 in January 2026.
- Debt to Capital
- Similar to the debt to equity ratio, the debt to capital ratio exhibited a downward trend from 0.28 in October 2020 to 0.14 in October 2023. This indicates a decreasing proportion of debt in the company’s capital structure. Subsequently, the ratio increased substantially, reaching 0.39 by October 2025, and stabilizing around 0.37-0.39 through January 2026.
- Debt to Assets
- The debt to assets ratio followed a comparable pattern, declining from 0.15 in October 2020 to 0.08 in October 2023. This suggests a decreasing proportion of assets financed by debt. A marked increase is then observed, with the ratio rising to 0.24 by October 2025, and remaining relatively stable through January 2026.
- Financial Leverage
- Financial leverage, as measured by the ratio, remained relatively stable in the 2.25 to 2.49 range through October 2021. It then showed a gradual increase, accelerating significantly to 2.69 in April 2024, and peaking at 2.74 in July 2024. The ratio then decreased slightly to 2.58 by January 2026, but remains considerably higher than earlier periods.
- Interest Coverage
- The interest coverage ratio demonstrated a consistent upward trend from 25.98 in October 2020 to 41.54 in April 2022, indicating a strengthening ability to meet interest obligations. However, a clear downward trend commenced in July 2022, with the ratio declining to 9.71 by October 2025 and 9.02 by January 2026. This suggests a weakening capacity to cover interest expenses, despite remaining above 7.0.
In summary, the initial period reflects a conservative capital structure and strong interest coverage. The latter period, however, indicates a strategic or necessary shift towards increased debt financing, accompanied by a corresponding decline in the ability to comfortably cover interest payments. This shift warrants further investigation to understand the underlying drivers and potential implications for the company’s long-term financial health.
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Debt Ratios
Coverage Ratios
Debt to Equity
Cisco Systems Inc., debt to equity calculation (quarterly data)
| Jan 24, 2026 | Oct 25, 2025 | Jul 26, 2025 | Apr 26, 2025 | Jan 25, 2025 | Oct 26, 2024 | Jul 27, 2024 | Apr 27, 2024 | Jan 27, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 23, 2021 | Oct 24, 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Short-term debt | 8,719) | 6,725) | 5,232) | 6,422) | 11,413) | 12,364) | 11,341) | 11,891) | 4,936) | 990) | 1,733) | 1,731) | 1,250) | 1,249) | 1,099) | 1,000) | 2,502) | 506) | 2,508) | 2,000) | 5,000) | 5,002) | |||||||
| Long-term debt, excluding current portion | 21,367) | 21,364) | 22,861) | 22,857) | 19,625) | 19,623) | 19,621) | 20,102) | 6,669) | 6,660) | 6,658) | 6,663) | 7,637) | 7,629) | 8,416) | 8,418) | 8,969) | 8,996) | 9,018) | 9,532) | 9,554) | 9,564) | |||||||
| Total debt | 30,086) | 28,089) | 28,093) | 29,279) | 31,038) | 31,987) | 30,962) | 31,993) | 11,605) | 7,650) | 8,391) | 8,394) | 8,887) | 8,878) | 9,515) | 9,418) | 11,471) | 9,502) | 11,526) | 11,532) | 14,554) | 14,566) | |||||||
| Total equity | 47,723) | 46,873) | 46,843) | 45,935) | 45,530) | 45,277) | 45,457) | 45,768) | 46,251) | 45,210) | 44,353) | 42,295) | 41,474) | 40,272) | 39,773) | 40,400) | 39,496) | 42,701) | 41,275) | 40,205) | 39,121) | 38,157) | |||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Debt to equity1 | 0.63 | 0.60 | 0.60 | 0.64 | 0.68 | 0.71 | 0.68 | 0.70 | 0.25 | 0.17 | 0.19 | 0.20 | 0.21 | 0.22 | 0.24 | 0.23 | 0.29 | 0.22 | 0.28 | 0.29 | 0.37 | 0.38 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||||||||||
| Apple Inc. | — | 1.03 | 1.34 | 1.54 | 1.47 | 1.45 | 1.87 | 1.52 | 1.41 | 1.46 | 1.79 | 1.81 | 1.76 | 1.96 | 2.37 | 2.06 | 1.78 | 1.71 | 1.98 | 1.89 | 1.76 | 1.69 | |||||||
| Arista Networks Inc. | — | — | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | — | — | — | |||||||
| Dell Technologies Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 5.36 | 9.04 | 13.39 | — | — | — | — | |||||||
| Super Micro Computer Inc. | 0.70 | 0.73 | 0.75 | 0.39 | 0.31 | 0.38 | 0.40 | 0.37 | 0.12 | 0.07 | 0.15 | 0.11 | 0.09 | 0.15 | 0.42 | 0.43 | 0.27 | 0.25 | 0.09 | 0.08 | 0.04 | 0.03 | |||||||
Based on: 10-Q (reporting date: 2026-01-24), 10-Q (reporting date: 2025-10-25), 10-K (reporting date: 2025-07-26), 10-Q (reporting date: 2025-04-26), 10-Q (reporting date: 2025-01-25), 10-Q (reporting date: 2024-10-26), 10-K (reporting date: 2024-07-27), 10-Q (reporting date: 2024-04-27), 10-Q (reporting date: 2024-01-27), 10-Q (reporting date: 2023-10-28), 10-K (reporting date: 2023-07-29), 10-Q (reporting date: 2023-04-29), 10-Q (reporting date: 2023-01-28), 10-Q (reporting date: 2022-10-29), 10-K (reporting date: 2022-07-30), 10-Q (reporting date: 2022-04-30), 10-Q (reporting date: 2022-01-29), 10-Q (reporting date: 2021-10-30), 10-K (reporting date: 2021-07-31), 10-Q (reporting date: 2021-05-01), 10-Q (reporting date: 2021-01-23), 10-Q (reporting date: 2020-10-24).
1 Q2 2026 Calculation
Debt to equity = Total debt ÷ Total equity
= 30,086 ÷ 47,723 = 0.63
2 Click competitor name to see calculations.
The debt to equity ratio for the analyzed period demonstrates considerable fluctuation. Initially, the ratio exhibited a decreasing trend from 0.38 in October 2020 to a low of 0.22 in October 2021. This suggests a strengthening of the company’s financial position through a reduction in relative debt or an increase in equity during that timeframe.
- Initial Decreasing Trend (Oct 2020 - Oct 2021)
- From October 2020 through October 2021, the debt to equity ratio consistently declined. This indicates a decreasing reliance on debt financing relative to equity, potentially signaling improved financial health and reduced risk. The decrease from 0.38 to 0.22 represents a substantial shift in the capital structure.
Following this decline, the ratio experienced a period of relative stability, fluctuating between 0.20 and 0.29 from January 2022 to October 2022. This suggests a period of consolidation in the company’s capital structure. However, a significant increase is then observed beginning in January 2024.
- Significant Increase (Jan 2024 - Oct 2024)
- Starting in January 2024, the debt to equity ratio increased dramatically, rising from 0.25 to 0.71 by October 2024. This substantial increase suggests a significant shift towards debt financing, potentially due to large debt issuances or a decrease in equity. The ratio peaked at 0.70 in April 2024 before slightly decreasing to 0.68 in July 2024 and then increasing again.
After peaking in October 2024, the ratio shows a slight downward trend, decreasing to 0.63 in October 2025. While still considerably higher than levels observed prior to 2024, this indicates a potential attempt to moderate the increased leverage. The ratio remains elevated throughout the analyzed period, suggesting a sustained change in the company’s financing strategy.
- Recent Fluctuations (Oct 2024 - Oct 2025)
- The period from October 2024 to October 2025 demonstrates a slight decrease in the debt to equity ratio, moving from 0.71 to 0.63. This suggests a possible effort to rebalance the capital structure, although the ratio remains significantly higher than earlier periods. The fluctuations within this timeframe indicate ongoing adjustments to debt and equity levels.
Overall, the analyzed period reveals a transition from a relatively conservative capital structure to one with substantially increased leverage, particularly evident from January 2024 onwards. The recent slight decrease in the ratio may indicate a corrective measure, but the company’s debt to equity position remains considerably different than it was at the beginning of the analyzed timeframe.
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Debt to Capital
Cisco Systems Inc., debt to capital calculation (quarterly data)
| Jan 24, 2026 | Oct 25, 2025 | Jul 26, 2025 | Apr 26, 2025 | Jan 25, 2025 | Oct 26, 2024 | Jul 27, 2024 | Apr 27, 2024 | Jan 27, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 23, 2021 | Oct 24, 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Short-term debt | 8,719) | 6,725) | 5,232) | 6,422) | 11,413) | 12,364) | 11,341) | 11,891) | 4,936) | 990) | 1,733) | 1,731) | 1,250) | 1,249) | 1,099) | 1,000) | 2,502) | 506) | 2,508) | 2,000) | 5,000) | 5,002) | |||||||
| Long-term debt, excluding current portion | 21,367) | 21,364) | 22,861) | 22,857) | 19,625) | 19,623) | 19,621) | 20,102) | 6,669) | 6,660) | 6,658) | 6,663) | 7,637) | 7,629) | 8,416) | 8,418) | 8,969) | 8,996) | 9,018) | 9,532) | 9,554) | 9,564) | |||||||
| Total debt | 30,086) | 28,089) | 28,093) | 29,279) | 31,038) | 31,987) | 30,962) | 31,993) | 11,605) | 7,650) | 8,391) | 8,394) | 8,887) | 8,878) | 9,515) | 9,418) | 11,471) | 9,502) | 11,526) | 11,532) | 14,554) | 14,566) | |||||||
| Total equity | 47,723) | 46,873) | 46,843) | 45,935) | 45,530) | 45,277) | 45,457) | 45,768) | 46,251) | 45,210) | 44,353) | 42,295) | 41,474) | 40,272) | 39,773) | 40,400) | 39,496) | 42,701) | 41,275) | 40,205) | 39,121) | 38,157) | |||||||
| Total capital | 77,809) | 74,962) | 74,936) | 75,214) | 76,568) | 77,264) | 76,419) | 77,761) | 57,856) | 52,860) | 52,744) | 50,689) | 50,361) | 49,150) | 49,288) | 49,818) | 50,967) | 52,203) | 52,801) | 51,737) | 53,675) | 52,723) | |||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Debt to capital1 | 0.39 | 0.37 | 0.37 | 0.39 | 0.41 | 0.41 | 0.41 | 0.41 | 0.20 | 0.14 | 0.16 | 0.17 | 0.18 | 0.18 | 0.19 | 0.19 | 0.23 | 0.18 | 0.22 | 0.22 | 0.27 | 0.28 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||||||||||
| Apple Inc. | — | 0.51 | 0.57 | 0.61 | 0.60 | 0.59 | 0.65 | 0.60 | 0.59 | 0.59 | 0.64 | 0.64 | 0.64 | 0.66 | 0.70 | 0.67 | 0.64 | 0.63 | 0.66 | 0.65 | 0.64 | 0.63 | |||||||
| Arista Networks Inc. | — | — | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | — | — | — | |||||||
| Dell Technologies Inc. | 1.11 | 1.12 | 1.06 | 1.10 | 1.13 | 1.12 | 1.10 | 1.11 | 1.11 | 1.12 | 1.12 | 1.15 | 1.12 | 1.10 | 1.07 | 0.84 | 0.90 | 0.93 | — | — | — | — | |||||||
| Super Micro Computer Inc. | 0.41 | 0.42 | 0.43 | 0.28 | 0.23 | 0.28 | 0.29 | 0.27 | 0.11 | 0.06 | 0.13 | 0.10 | 0.09 | 0.13 | 0.30 | 0.30 | 0.21 | 0.20 | 0.08 | 0.07 | 0.04 | 0.03 | |||||||
Based on: 10-Q (reporting date: 2026-01-24), 10-Q (reporting date: 2025-10-25), 10-K (reporting date: 2025-07-26), 10-Q (reporting date: 2025-04-26), 10-Q (reporting date: 2025-01-25), 10-Q (reporting date: 2024-10-26), 10-K (reporting date: 2024-07-27), 10-Q (reporting date: 2024-04-27), 10-Q (reporting date: 2024-01-27), 10-Q (reporting date: 2023-10-28), 10-K (reporting date: 2023-07-29), 10-Q (reporting date: 2023-04-29), 10-Q (reporting date: 2023-01-28), 10-Q (reporting date: 2022-10-29), 10-K (reporting date: 2022-07-30), 10-Q (reporting date: 2022-04-30), 10-Q (reporting date: 2022-01-29), 10-Q (reporting date: 2021-10-30), 10-K (reporting date: 2021-07-31), 10-Q (reporting date: 2021-05-01), 10-Q (reporting date: 2021-01-23), 10-Q (reporting date: 2020-10-24).
1 Q2 2026 Calculation
Debt to capital = Total debt ÷ Total capital
= 30,086 ÷ 77,809 = 0.39
2 Click competitor name to see calculations.
The debt to capital ratio for the analyzed period demonstrates a generally decreasing trend initially, followed by a significant increase and subsequent stabilization. From October 2020 through October 2022, the ratio exhibited a consistent decline, indicating a decreasing reliance on debt financing relative to the company’s capital structure. However, beginning with the January 2024 observation, a substantial increase is noted, followed by a period of relative stability.
- Initial Declining Trend (Oct 2020 – Oct 2022)
- The debt to capital ratio decreased from 0.28 in October 2020 to 0.18 in October 2022. This suggests a strengthening financial position, potentially through increased equity financing, retained earnings, or debt reduction. The consistent downward movement during this period indicates a deliberate or favorable shift in the company’s capital structure towards lower leverage.
- Significant Increase (Jan 2024 – Apr 2024)
- A marked increase in the debt to capital ratio is observed between January 2024 (0.20) and April 2024 (0.41). This represents a substantial change in the company’s financing strategy, potentially due to a large debt issuance, a decrease in total capital, or a combination of both. The magnitude of this increase warrants further investigation to understand the underlying reasons and potential implications.
- Stabilization (Jul 2024 – Jan 2026)
- Following the increase in April 2024, the debt to capital ratio stabilized, fluctuating between 0.37 and 0.41. This suggests that the company has maintained a relatively consistent level of leverage in the subsequent periods. While elevated compared to the earlier observations, the stability indicates that the initial increase was not a temporary fluctuation but rather a new, sustained level of debt financing.
Overall, the observed pattern suggests a period of deleveraging followed by a significant increase in debt relative to capital, and then a period of stabilization at a higher level. The reasons for these shifts require further analysis, considering factors such as investment activities, profitability, and overall economic conditions.
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Debt to Assets
Cisco Systems Inc., debt to assets calculation (quarterly data)
| Jan 24, 2026 | Oct 25, 2025 | Jul 26, 2025 | Apr 26, 2025 | Jan 25, 2025 | Oct 26, 2024 | Jul 27, 2024 | Apr 27, 2024 | Jan 27, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 23, 2021 | Oct 24, 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Short-term debt | 8,719) | 6,725) | 5,232) | 6,422) | 11,413) | 12,364) | 11,341) | 11,891) | 4,936) | 990) | 1,733) | 1,731) | 1,250) | 1,249) | 1,099) | 1,000) | 2,502) | 506) | 2,508) | 2,000) | 5,000) | 5,002) | |||||||
| Long-term debt, excluding current portion | 21,367) | 21,364) | 22,861) | 22,857) | 19,625) | 19,623) | 19,621) | 20,102) | 6,669) | 6,660) | 6,658) | 6,663) | 7,637) | 7,629) | 8,416) | 8,418) | 8,969) | 8,996) | 9,018) | 9,532) | 9,554) | 9,564) | |||||||
| Total debt | 30,086) | 28,089) | 28,093) | 29,279) | 31,038) | 31,987) | 30,962) | 31,993) | 11,605) | 7,650) | 8,391) | 8,394) | 8,887) | 8,878) | 9,515) | 9,418) | 11,471) | 9,502) | 11,526) | 11,532) | 14,554) | 14,566) | |||||||
| Total assets | 123,371) | 121,102) | 122,291) | 119,782) | 121,375) | 123,333) | 124,413) | 122,998) | 101,174) | 98,782) | 101,852) | 97,529) | 95,840) | 93,054) | 94,002) | 92,797) | 94,262) | 95,981) | 97,497) | 93,896) | 95,601) | 95,003) | |||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Debt to assets1 | 0.24 | 0.23 | 0.23 | 0.24 | 0.26 | 0.26 | 0.25 | 0.26 | 0.11 | 0.08 | 0.08 | 0.09 | 0.09 | 0.10 | 0.10 | 0.10 | 0.12 | 0.10 | 0.12 | 0.12 | 0.15 | 0.15 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||||||||||
| Apple Inc. | — | 0.24 | 0.27 | 0.31 | 0.30 | 0.28 | 0.29 | 0.31 | 0.31 | 0.31 | 0.32 | 0.33 | 0.33 | 0.32 | 0.34 | 0.36 | 0.34 | 0.32 | 0.36 | 0.37 | 0.36 | 0.32 | |||||||
| Arista Networks Inc. | — | — | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | — | — | — | |||||||
| Dell Technologies Inc. | 0.32 | 0.33 | 0.31 | 0.31 | 0.30 | 0.32 | 0.32 | 0.32 | 0.32 | 0.34 | 0.33 | 0.32 | 0.30 | 0.31 | 0.29 | 0.35 | 0.36 | 0.38 | — | — | — | — | |||||||
| Super Micro Computer Inc. | 0.17 | 0.33 | 0.34 | 0.23 | 0.20 | 0.21 | 0.22 | 0.21 | 0.07 | 0.04 | 0.08 | 0.06 | 0.06 | 0.08 | 0.19 | 0.18 | 0.12 | 0.11 | 0.04 | 0.04 | 0.02 | 0.02 | |||||||
Based on: 10-Q (reporting date: 2026-01-24), 10-Q (reporting date: 2025-10-25), 10-K (reporting date: 2025-07-26), 10-Q (reporting date: 2025-04-26), 10-Q (reporting date: 2025-01-25), 10-Q (reporting date: 2024-10-26), 10-K (reporting date: 2024-07-27), 10-Q (reporting date: 2024-04-27), 10-Q (reporting date: 2024-01-27), 10-Q (reporting date: 2023-10-28), 10-K (reporting date: 2023-07-29), 10-Q (reporting date: 2023-04-29), 10-Q (reporting date: 2023-01-28), 10-Q (reporting date: 2022-10-29), 10-K (reporting date: 2022-07-30), 10-Q (reporting date: 2022-04-30), 10-Q (reporting date: 2022-01-29), 10-Q (reporting date: 2021-10-30), 10-K (reporting date: 2021-07-31), 10-Q (reporting date: 2021-05-01), 10-Q (reporting date: 2021-01-23), 10-Q (reporting date: 2020-10-24).
1 Q2 2026 Calculation
Debt to assets = Total debt ÷ Total assets
= 30,086 ÷ 123,371 = 0.24
2 Click competitor name to see calculations.
The debt to assets ratio for the analyzed period demonstrates a generally decreasing trend initially, followed by a significant increase in later periods. From October 2020 through October 2022, the ratio exhibited a consistent decline, indicating a strengthening solvency position. However, beginning with the January 2024 observation, the ratio increased substantially and remained elevated through the final observation in January 2026.
- Initial Decreasing Trend (Oct 2020 – Oct 2022)
- The debt to assets ratio decreased from 0.15 in October 2020 to 0.10 in October 2022. This suggests a reduction in the proportion of assets financed by debt during this period. The company either decreased its debt levels, increased its asset base, or a combination of both, leading to improved financial leverage.
- Period of Stability (Jan 2023 – Jul 2023)
- From January 2023 through July 2023, the ratio remained relatively stable, fluctuating between 0.08 and 0.09. This indicates a period of consistent capital structure management with no significant changes in the relationship between debt and assets.
- Significant Increase (Jan 2024 – Jan 2026)
- Starting in January 2024, the debt to assets ratio experienced a marked increase, rising to 0.11 and peaking at 0.26 in April 2025. This substantial rise suggests a significant increase in debt financing relative to assets. The ratio remained elevated, concluding at 0.23 in January 2026. This could be due to new debt issuance, a decrease in asset value, or a combination of both. The increase warrants further investigation to understand the underlying reasons and potential implications for the company’s financial risk.
- Total Debt and Total Assets
- Total debt increased significantly from approximately US$11.6 billion in January 2024 to over US$31 billion in April 2024, contributing to the observed ratio increase. Total assets also increased during this period, but not at the same rate as the debt, resulting in a higher debt to assets ratio. While assets continued to fluctuate, the debt remained at a higher level throughout the remainder of the analyzed period.
Overall, the solvency position, as indicated by the debt to assets ratio, initially improved but experienced a substantial shift towards increased leverage in the latter part of the analyzed timeframe. The recent increase in the ratio should be monitored closely to assess its impact on the company’s long-term financial health.
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Financial Leverage
Cisco Systems Inc., financial leverage calculation (quarterly data)
| Jan 24, 2026 | Oct 25, 2025 | Jul 26, 2025 | Apr 26, 2025 | Jan 25, 2025 | Oct 26, 2024 | Jul 27, 2024 | Apr 27, 2024 | Jan 27, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 23, 2021 | Oct 24, 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Total assets | 123,371) | 121,102) | 122,291) | 119,782) | 121,375) | 123,333) | 124,413) | 122,998) | 101,174) | 98,782) | 101,852) | 97,529) | 95,840) | 93,054) | 94,002) | 92,797) | 94,262) | 95,981) | 97,497) | 93,896) | 95,601) | 95,003) | |||||||
| Total equity | 47,723) | 46,873) | 46,843) | 45,935) | 45,530) | 45,277) | 45,457) | 45,768) | 46,251) | 45,210) | 44,353) | 42,295) | 41,474) | 40,272) | 39,773) | 40,400) | 39,496) | 42,701) | 41,275) | 40,205) | 39,121) | 38,157) | |||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Financial leverage1 | 2.59 | 2.58 | 2.61 | 2.61 | 2.67 | 2.72 | 2.74 | 2.69 | 2.19 | 2.18 | 2.30 | 2.31 | 2.31 | 2.31 | 2.36 | 2.30 | 2.39 | 2.25 | 2.36 | 2.34 | 2.44 | 2.49 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||||||||||
| Apple Inc. | — | 4.30 | 4.87 | 5.04 | 4.96 | 5.15 | 6.41 | 4.97 | 4.55 | 4.77 | 5.67 | 5.56 | 5.34 | 6.11 | 6.96 | 5.79 | 5.20 | 5.30 | 5.56 | 5.13 | 4.87 | 5.35 | |||||||
| Arista Networks Inc. | — | — | 1.57 | 1.52 | 1.52 | 1.43 | 1.41 | 1.39 | 1.38 | 1.34 | 1.38 | 1.39 | 1.40 | 1.42 | 1.39 | 1.41 | 1.45 | 1.47 | — | — | — | — | |||||||
| Dell Technologies Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 15.15 | 25.43 | 34.92 | — | — | — | — | |||||||
| Super Micro Computer Inc. | 4.00 | 2.21 | 2.22 | 1.68 | 1.56 | 1.85 | 1.81 | 1.74 | 1.76 | 1.89 | 1.86 | 1.81 | 1.69 | 2.03 | 2.25 | 2.41 | 2.26 | 2.14 | 2.05 | 1.90 | 1.78 | 1.69 | |||||||
Based on: 10-Q (reporting date: 2026-01-24), 10-Q (reporting date: 2025-10-25), 10-K (reporting date: 2025-07-26), 10-Q (reporting date: 2025-04-26), 10-Q (reporting date: 2025-01-25), 10-Q (reporting date: 2024-10-26), 10-K (reporting date: 2024-07-27), 10-Q (reporting date: 2024-04-27), 10-Q (reporting date: 2024-01-27), 10-Q (reporting date: 2023-10-28), 10-K (reporting date: 2023-07-29), 10-Q (reporting date: 2023-04-29), 10-Q (reporting date: 2023-01-28), 10-Q (reporting date: 2022-10-29), 10-K (reporting date: 2022-07-30), 10-Q (reporting date: 2022-04-30), 10-Q (reporting date: 2022-01-29), 10-Q (reporting date: 2021-10-30), 10-K (reporting date: 2021-07-31), 10-Q (reporting date: 2021-05-01), 10-Q (reporting date: 2021-01-23), 10-Q (reporting date: 2020-10-24).
1 Q2 2026 Calculation
Financial leverage = Total assets ÷ Total equity
= 123,371 ÷ 47,723 = 2.59
2 Click competitor name to see calculations.
The financial leverage ratio for the observed period demonstrates a generally stable pattern with some fluctuations. Initially, the ratio exhibits a slight decreasing trend from 2.49 in October 2020 to a low of 2.25 in October 2021. Following this, the ratio experiences a modest increase, reaching 2.39 in January 2022 before fluctuating around the 2.30-2.36 range through July 2022. A period of relative stability is then observed through July 2023, with the ratio remaining consistently around 2.30-2.31. A notable increase begins in October 2023, rising to 2.69 by July 2024, and peaking at 2.74 in January 2025. The ratio then shows a slight decline through October 2025, before stabilizing around 2.58-2.61 through January 2026.
- Total Assets & Equity Relationship
- The financial leverage ratio, calculated as total assets divided by total equity, indicates the extent to which the entity relies on debt financing. The observed pattern suggests a consistent reliance on debt, with assets being financed approximately 2.3 to 2.7 times by equity. The increase in the ratio from late 2023 onwards suggests a greater proportion of assets are being financed through equity, potentially indicating increased borrowing or a shift in capital structure.
The period between October 2020 and October 2021 shows a modest reduction in financial leverage, potentially indicating a strengthening of the equity base relative to assets. However, this trend reverses from January 2022 onwards, with the ratio stabilizing and then increasing. The most significant change occurs in the latter part of the observed period, with a clear upward trend in the ratio. This suggests a potential increase in financial risk, as the entity becomes more reliant on debt financing. The slight decrease in the ratio towards the end of the period may indicate a stabilization of the capital structure or a deliberate effort to reduce leverage.
- Long-Term Trend
- Over the entire period, the financial leverage ratio has increased from approximately 2.49 to 2.59. While the fluctuations are present, the overall trend suggests a gradual increase in the entity’s reliance on financial leverage. This could be due to various factors, including expansion plans, acquisitions, or changes in financing strategies.
The observed fluctuations in the financial leverage ratio warrant further investigation to understand the underlying drivers. Analyzing the components of total assets and total equity, alongside other solvency and profitability ratios, would provide a more comprehensive understanding of the entity’s financial health and risk profile.
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Interest Coverage
Cisco Systems Inc., interest coverage calculation (quarterly data)
| Jan 24, 2026 | Oct 25, 2025 | Jul 26, 2025 | Apr 26, 2025 | Jan 25, 2025 | Oct 26, 2024 | Jul 27, 2024 | Apr 27, 2024 | Jan 27, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 23, 2021 | Oct 24, 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Net income | 3,175) | 2,860) | 2,550) | 2,491) | 2,428) | 2,711) | 2,162) | 1,886) | 2,634) | 3,638) | 3,958) | 3,212) | 2,773) | 2,670) | 2,815) | 3,044) | 2,973) | 2,980) | 3,009) | 2,863) | 2,545) | 2,174) | |||||||
| Add: Income tax expense | 471) | 531) | 449) | 456) | 459) | (444) | 234) | 349) | 527) | 804) | 513) | 745) | 642) | 805) | 601) | 757) | 630) | 677) | 726) | 728) | 710) | 507) | |||||||
| Add: Interest expense | 370) | 350) | 368) | 403) | 404) | 418) | 418) | 357) | 120) | 111) | 111) | 109) | 107) | 100) | 93) | 90) | 88) | 89) | 98) | 111) | 113) | 112) | |||||||
| Earnings before interest and tax (EBIT) | 4,016) | 3,741) | 3,367) | 3,350) | 3,291) | 2,685) | 2,814) | 2,592) | 3,281) | 4,553) | 4,582) | 4,066) | 3,522) | 3,575) | 3,509) | 3,891) | 3,691) | 3,746) | 3,833) | 3,702) | 3,368) | 2,793) | |||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Interest coverage1 | 9.71 | 9.02 | 7.97 | 7.39 | 7.13 | 8.66 | 13.16 | 21.47 | 36.55 | 38.18 | 36.87 | 35.87 | 37.17 | 39.53 | 41.21 | 41.54 | 38.79 | 35.64 | 31.56 | 29.20 | 27.76 | 25.98 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Interest Coverage, Competitors2 | |||||||||||||||||||||||||||||
| Super Micro Computer Inc. | 13.06 | 14.63 | 21.24 | 32.93 | 47.86 | 45.14 | 63.83 | 58.83 | 58.89 | 84.71 | 72.55 | 70.87 | 68.85 | 56.79 | 53.71 | 51.73 | 42.94 | 45.86 | 48.81 | 38.80 | 38.83 | 36.02 | |||||||
Based on: 10-Q (reporting date: 2026-01-24), 10-Q (reporting date: 2025-10-25), 10-K (reporting date: 2025-07-26), 10-Q (reporting date: 2025-04-26), 10-Q (reporting date: 2025-01-25), 10-Q (reporting date: 2024-10-26), 10-K (reporting date: 2024-07-27), 10-Q (reporting date: 2024-04-27), 10-Q (reporting date: 2024-01-27), 10-Q (reporting date: 2023-10-28), 10-K (reporting date: 2023-07-29), 10-Q (reporting date: 2023-04-29), 10-Q (reporting date: 2023-01-28), 10-Q (reporting date: 2022-10-29), 10-K (reporting date: 2022-07-30), 10-Q (reporting date: 2022-04-30), 10-Q (reporting date: 2022-01-29), 10-Q (reporting date: 2021-10-30), 10-K (reporting date: 2021-07-31), 10-Q (reporting date: 2021-05-01), 10-Q (reporting date: 2021-01-23), 10-Q (reporting date: 2020-10-24).
1 Q2 2026 Calculation
Interest coverage
= (EBITQ2 2026
+ EBITQ1 2026
+ EBITQ4 2025
+ EBITQ3 2025)
÷ (Interest expenseQ2 2026
+ Interest expenseQ1 2026
+ Interest expenseQ4 2025
+ Interest expenseQ3 2025)
= (4,016 + 3,741 + 3,367 + 3,350)
÷ (370 + 350 + 368 + 403)
= 9.71
2 Click competitor name to see calculations.
The interest coverage ratio for the analyzed period demonstrates a generally strong ability to meet interest obligations from earnings. However, a notable decline in this metric is observed towards the end of the period.
- Overall Trend
- From October 2020 through April 2022, the interest coverage ratio exhibits a consistent upward trend, increasing from 25.98 to 41.54. This indicates a strengthening capacity to cover interest expenses with operating income. Following this peak, the ratio experiences a period of relative stability, fluctuating between approximately 35.87 and 41.21 through July 2022. A clear downward trend emerges starting in October 2022, accelerating through January 2024. The ratio declines significantly, reaching 21.47 by January 2024, before stabilizing somewhat in subsequent periods, but remaining substantially lower than earlier values.
- Recent Performance (Oct 2022 - Jan 2024)
- The period from October 2022 to January 2024 is characterized by a pronounced decrease in the interest coverage ratio. The ratio falls from 39.53 in October 2022 to 21.47 in January 2024, representing a decline of approximately 45.7%. This decrease coincides with a period where interest expense remained relatively stable or increased slightly, while earnings before interest and tax (EBIT) experienced a more substantial reduction.
- EBIT and Interest Expense Relationship
- Throughout most of the analyzed period, EBIT consistently exceeded interest expense by a significant margin, contributing to the high interest coverage ratio. However, the decline in EBIT observed from October 2022 onwards, coupled with relatively consistent interest expense, directly contributed to the observed decrease in the interest coverage ratio. The most dramatic decline in the ratio occurs when EBIT falls to 2,592 in April 2024, while interest expense rises to 357, resulting in a ratio of 21.47. Further increases in interest expense to 418 in July 2024 and remaining at that level in October 2024 contribute to the continued low ratios.
- Latest Observations (Apr 2024 - Jan 2026)
- From April 2024 through January 2026, the interest coverage ratio shows some signs of stabilization, albeit at a lower level than previously observed. The ratio fluctuates between 7.13 and 9.71. While the decline has slowed, the ratio remains significantly below the levels seen prior to October 2022, indicating a reduced margin of safety in covering interest obligations. The slight increase in the ratio towards January 2026 suggests a potential, albeit modest, improvement in the company’s ability to service its debt.
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