Cisco Systems Inc. (CSCO)

Short-term (Operating) Activity Analysis

Difficulty: Beginner

Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.

Ratios (Summary)

Cisco Systems Inc., short-term (operating) activity ratios

		Jul 29, 2017	Jul 30, 2016	Jul 25, 2015	Jul 26, 2014	Jul 27, 2013	Jul 28, 2012
	Turnover Ratios
	Inventory turnover
	Receivables turnover
	Payables turnover
	Working capital turnover
	Average No. of Days
	Average inventory processing period
	Add: Average receivable collection period
	Operating cycle
	Less: Average payables payment period
	Cash conversion cycle

Source: Based on data from Cisco Systems Inc. Annual Reports

Ratio	Description	The company
Inventory turnover	An activity ratio calculated as cost of goods sold divided by inventory.	Cisco Systems Inc.'s inventory turnover improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.
Receivables turnover	An activity ratio equal to revenue divided by receivables.	Cisco Systems Inc.'s receivables turnover deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.
Payables turnover	An activity ratio calculated as cost of goods sold divided by payables.	Cisco Systems Inc.'s payables turnover declined from 2015 to 2016 and from 2016 to 2017.
Working capital turnover	An activity ratio calculated as revenue divided by working capital.	Cisco Systems Inc.'s working capital turnover deteriorated from 2015 to 2016 and from 2016 to 2017.
Average inventory processing period	An activity ratio equal to the number of days in the period divided by inventory turnover over the period.	Cisco Systems Inc.'s average inventory processing period improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.
Average receivable collection period	An activity ratio equal to the number of days in the period divided by receivables turnover.	Cisco Systems Inc.'s average receivable collection period deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.
Operating cycle	Equal to average inventory processing period plus average receivables collection period.	Cisco Systems Inc.'s operating cycle improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.
Average payables payment period	An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period.
Cash conversion cycle	A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period.	Cisco Systems Inc.'s cash conversion cycle improved from 2015 to 2016 and from 2016 to 2017.

Top

Inventory Turnover

Cisco Systems Inc., inventory turnover calculation, comparison to benchmarks

		Jul 29, 2017	Jul 30, 2016	Jul 25, 2015	Jul 26, 2014	Jul 27, 2013	Jul 28, 2012
	Selected Financial Data (USD $ in millions)
	Cost of sales
	Inventories
	Ratio
	Inventory turnover¹
	Benchmarks
	Inventory Turnover, Competitors
	Apple Inc.
	Applied Materials Inc.
	Broadcom Ltd.
	HP Inc.
	Intel Corp.
	NVIDIA Corp.
	Qualcomm Inc.
	Texas Instruments Inc.
	Inventory Turnover, Sector
	Technology Hardware & Equipment
	Inventory Turnover, Industry
	Technology

Source: Based on data from Cisco Systems Inc. Annual Reports

2017 Calculations

¹ Inventory turnover = Cost of sales ÷ Inventories
= ÷ =

Ratio	Description	The company
Inventory turnover	An activity ratio calculated as cost of goods sold divided by inventory.	Cisco Systems Inc.'s inventory turnover improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

Top

Receivables Turnover

Cisco Systems Inc., receivables turnover calculation, comparison to benchmarks

		Jul 29, 2017	Jul 30, 2016	Jul 25, 2015	Jul 26, 2014	Jul 27, 2013	Jul 28, 2012
	Selected Financial Data (USD $ in millions)
	Revenue
	Accounts receivable, net of allowance for doubtful accounts
	Ratio
	Receivables turnover¹
	Benchmarks
	Receivables Turnover, Competitors
	Apple Inc.
	Applied Materials Inc.
	Broadcom Ltd.
	HP Inc.
	Intel Corp.
	NVIDIA Corp.
	Qualcomm Inc.
	Texas Instruments Inc.
	Receivables Turnover, Sector
	Technology Hardware & Equipment
	Receivables Turnover, Industry
	Technology

Source: Based on data from Cisco Systems Inc. Annual Reports

2017 Calculations

¹ Receivables turnover = Revenue ÷ Accounts receivable, net of allowance for doubtful accounts
= ÷ =

Ratio	Description	The company
Receivables turnover	An activity ratio equal to revenue divided by receivables.	Cisco Systems Inc.'s receivables turnover deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.

Top

Payables Turnover

Cisco Systems Inc., payables turnover calculation, comparison to benchmarks

		Jul 29, 2017	Jul 30, 2016	Jul 25, 2015	Jul 26, 2014	Jul 27, 2013	Jul 28, 2012
	Selected Financial Data (USD $ in millions)
	Cost of sales
	Accounts payable
	Ratio
	Payables turnover¹
	Benchmarks
	Payables Turnover, Competitors
	Apple Inc.
	Applied Materials Inc.
	Broadcom Ltd.
	HP Inc.
	Intel Corp.
	NVIDIA Corp.
	Qualcomm Inc.
	Texas Instruments Inc.
	Payables Turnover, Sector
	Technology Hardware & Equipment
	Payables Turnover, Industry
	Technology

Source: Based on data from Cisco Systems Inc. Annual Reports

2017 Calculations

¹ Payables turnover = Cost of sales ÷ Accounts payable
= ÷ =

Ratio	Description	The company
Payables turnover	An activity ratio calculated as cost of goods sold divided by payables.	Cisco Systems Inc.'s payables turnover declined from 2015 to 2016 and from 2016 to 2017.

Top

Working Capital Turnover

Cisco Systems Inc., working capital turnover calculation, comparison to benchmarks

		Jul 29, 2017	Jul 30, 2016	Jul 25, 2015	Jul 26, 2014	Jul 27, 2013	Jul 28, 2012
	Selected Financial Data (USD $ in millions)
	Current assets
	Less: Current liabilities
	Working capital
	Revenue
	Ratio
	Working capital turnover¹
	Benchmarks
	Working Capital Turnover, Competitors
	Apple Inc.
	Applied Materials Inc.
	Broadcom Ltd.
	HP Inc.
	Intel Corp.
	NVIDIA Corp.
	Qualcomm Inc.
	Texas Instruments Inc.
	Working Capital Turnover, Sector
	Technology Hardware & Equipment
	Working Capital Turnover, Industry
	Technology

Source: Based on data from Cisco Systems Inc. Annual Reports

2017 Calculations

¹ Working capital turnover = Revenue ÷ Working capital
= ÷ =

Ratio	Description	The company
Working capital turnover	An activity ratio calculated as revenue divided by working capital.	Cisco Systems Inc.'s working capital turnover deteriorated from 2015 to 2016 and from 2016 to 2017.

Top

Average Inventory Processing Period

Cisco Systems Inc., average inventory processing period calculation, comparison to benchmarks

		Jul 29, 2017	Jul 30, 2016	Jul 25, 2015	Jul 26, 2014	Jul 27, 2013	Jul 28, 2012
	Selected Financial Data
	Inventory turnover
	Ratio (no. of days)
	Average inventory processing period¹
	Benchmarks (no. of days)
	Average Inventory Processing Period, Competitors
	Apple Inc.
	Applied Materials Inc.
	Broadcom Ltd.
	HP Inc.
	Intel Corp.
	NVIDIA Corp.
	Qualcomm Inc.
	Texas Instruments Inc.
	Average Inventory Processing Period, Sector
	Technology Hardware & Equipment
	Average Inventory Processing Period, Industry
	Technology

Source: Based on data from Cisco Systems Inc. Annual Reports

2017 Calculations

¹ Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =

Ratio	Description	The company
Average inventory processing period	An activity ratio equal to the number of days in the period divided by inventory turnover over the period.	Cisco Systems Inc.'s average inventory processing period improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

Top

Average Receivable Collection Period

Cisco Systems Inc., average receivable collection period calculation, comparison to benchmarks

		Jul 29, 2017	Jul 30, 2016	Jul 25, 2015	Jul 26, 2014	Jul 27, 2013	Jul 28, 2012
	Selected Financial Data
	Receivables turnover
	Ratio (no. of days)
	Average receivable collection period¹
	Benchmarks (no. of days)
	Average Receivable Collection Period, Competitors
	Apple Inc.
	Applied Materials Inc.
	Broadcom Ltd.
	HP Inc.
	Intel Corp.
	NVIDIA Corp.
	Qualcomm Inc.
	Texas Instruments Inc.
	Average Receivable Collection Period, Sector
	Technology Hardware & Equipment
	Average Receivable Collection Period, Industry
	Technology

Source: Based on data from Cisco Systems Inc. Annual Reports

2017 Calculations

¹ Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =

Ratio	Description	The company
Average receivable collection period	An activity ratio equal to the number of days in the period divided by receivables turnover.	Cisco Systems Inc.'s average receivable collection period deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.

Top

Operating Cycle

Cisco Systems Inc., operating cycle calculation, comparison to benchmarks

No. of days

		Jul 29, 2017	Jul 30, 2016	Jul 25, 2015	Jul 26, 2014	Jul 27, 2013	Jul 28, 2012
	Selected Financial Data
	Average inventory processing period
	Average receivable collection period
	Ratio
	Operating cycle¹
	Benchmarks
	Operating Cycle, Competitors
	Apple Inc.
	Applied Materials Inc.
	Broadcom Ltd.
	HP Inc.
	Intel Corp.
	NVIDIA Corp.
	Qualcomm Inc.
	Texas Instruments Inc.
	Operating Cycle, Sector
	Technology Hardware & Equipment
	Operating Cycle, Industry
	Technology

Source: Based on data from Cisco Systems Inc. Annual Reports

2017 Calculations

¹ Operating cycle = Average inventory processing period + Average receivable collection period
= + =

Ratio	Description	The company
Operating cycle	Equal to average inventory processing period plus average receivables collection period.	Cisco Systems Inc.'s operating cycle improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

Top

Average Payables Payment Period

Cisco Systems Inc., average payables payment period calculation, comparison to benchmarks

		Jul 29, 2017	Jul 30, 2016	Jul 25, 2015	Jul 26, 2014	Jul 27, 2013	Jul 28, 2012
	Selected Financial Data
	Payables turnover
	Ratio (no. of days)
	Average payables payment period¹
	Benchmarks (no. of days)
	Average Payables Payment Period, Competitors
	Apple Inc.
	Applied Materials Inc.
	Broadcom Ltd.
	HP Inc.
	Intel Corp.
	NVIDIA Corp.
	Qualcomm Inc.
	Texas Instruments Inc.
	Average Payables Payment Period, Sector
	Technology Hardware & Equipment
	Average Payables Payment Period, Industry
	Technology

Source: Based on data from Cisco Systems Inc. Annual Reports

2017 Calculations

¹ Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =

Ratio	Description	The company
Average payables payment period	An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period.

Top

Cash Conversion Cycle

Cisco Systems Inc., cash conversion cycle calculation, comparison to benchmarks

No. of days

		Jul 29, 2017	Jul 30, 2016	Jul 25, 2015	Jul 26, 2014	Jul 27, 2013	Jul 28, 2012
	Selected Financial Data
	Average inventory processing period
	Average receivable collection period
	Average payables payment period
	Ratio
	Cash conversion cycle¹
	Benchmarks
	Cash Conversion Cycle, Competitors
	Apple Inc.
	Applied Materials Inc.
	Broadcom Ltd.
	HP Inc.
	Intel Corp.
	NVIDIA Corp.
	Qualcomm Inc.
	Texas Instruments Inc.
	Cash Conversion Cycle, Sector
	Technology Hardware & Equipment
	Cash Conversion Cycle, Industry
	Technology

Source: Based on data from Cisco Systems Inc. Annual Reports

2017 Calculations

¹ Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= + – =

Ratio	Description	The company
Cash conversion cycle	A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period.	Cisco Systems Inc.'s cash conversion cycle improved from 2015 to 2016 and from 2016 to 2017.

Top

	Cisco Systems Inc.	Other companies (not purchased previously)
Long-term Trends
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Analysis
Financial Reporting Quality

	All companies
Long-term Trends
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Analysis
Financial Reporting Quality