Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Cisco Systems Inc., FCFF calculation
US$ in millions
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 financial performance over the observed six-year period is characterized by significant volatility in both operating cash flows and Free Cash Flow to the Firm (FCFF), featuring a distinct peak in 2023 followed by a sharp contraction in 2024 and a subsequent partial recovery.
- Net Cash Provided by Operating Activities
- Operating cash flow exhibited substantial fluctuations, starting at 15,454 million US$ in 2021 and decreasing to 13,226 million US$ in 2022. A significant surge occurred in 2023, reaching a period high of 19,886 million US$, before falling sharply to 10,880 million US$ in 2024. The final two years demonstrate a stabilization trend, with values remaining relatively flat at approximately 14,190 million US$.
- Free Cash Flow to the Firm (FCFF) Trends
- FCFF movements closely mirror the trajectory of operating cash activities. The metric reached its zenith in 2023 at 19,346 million US$ and hit its lowest point in 2024 at 10,702 million US$. By 2026, FCFF settled at 13,928 million US$, indicating a return to levels comparable to those seen at the beginning of the analyzed period.
- Correlation and Capital Intensity
- A tight correlation is observed between net cash from operations and FCFF across all reporting periods. The consistently narrow variance between these two metrics suggests that capital expenditures and other adjustments to FCFF have remained relatively stable and low in proportion to total operating cash generated, regardless of the overall volatility in cash flow volume.
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Interest Paid, Net of Tax
Cisco Systems Inc., interest paid, net of tax calculation
US$ in millions
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).
2 2026 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= 1,400 × 17.10% = 239
An analysis of the financial metrics reveals a significant escalation in net cash outflows for interest payments over the observed period, coinciding with notable volatility in the effective income tax rate.
- Interest Payment Trends
- Cash paid for interest, net of tax, remained relatively stable between 2021 and 2023, with values ranging from 290 million to 350 million US dollars. A sharp upward trajectory began in 2024, where payments increased to 492 million US dollars, eventually peaking at 1,376 million US dollars in 2025. Although a reduction to 1,161 million US dollars is observed in 2026, the expenditure remains substantially elevated compared to the 2021-2023 baseline.
- Effective Income Tax Rate (EITR) Dynamics
- The effective income tax rate demonstrated a consistent decline from 20.10% in 2021 to a low of 8.30% in 2025. This downward trend persisted for five consecutive years before a significant reversal occurred in 2026, where the rate climbed back to 17.10%, aligning more closely with the levels seen in 2022 and 2023.
- Correlation and Financial Insight
- The peak in net interest payments in 2025 aligns directly with the lowest recorded effective income tax rate of 8.30%. Since interest is reported net of tax, the diminished tax shield in 2025 likely contributed to the increase in net cash outflows. The subsequent rebound of the tax rate to 17.10% in 2026 correlates with a decrease in net interest payments, suggesting that the tax rate fluctuation played a role in the variance of the net cash impact, independent of the gross interest obligations.
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Enterprise Value to FCFF Ratio, Current
Cisco Systems Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 445,368) |
| Free cash flow to the firm (FCFF) | 13,928) |
| Valuation Ratio | |
| EV/FCFF | 31.98 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Apple Inc. | 50.13 |
| Arista Networks Inc. | 56.61 |
| Dell Technologies Inc. | 39.46 |
| Lumentum Holdings Inc. | 230.37 |
| Super Micro Computer Inc. | — |
| EV/FCFF, Sector | |
| Technology Hardware & Equipment | 50.22 |
| EV/FCFF, Industry | |
| Information Technology | 58.80 |
Based on: 10-K (reporting date: 2026-07-25).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Cisco Systems Inc., historical EV/FCFF 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) | |||||||
| Enterprise value (EV)1 | 445,171) | 279,496) | 209,173) | 212,520) | 176,666) | 234,167) | |
| Free cash flow to the firm (FCFF)2 | 13,928) | 14,664) | 10,702) | 19,346) | 13,039) | 15,112) | |
| Valuation Ratio | |||||||
| EV/FCFF3 | 31.96 | 19.06 | 19.55 | 10.98 | 13.55 | 15.50 | |
| Benchmarks | |||||||
| EV/FCFF, Competitors4 | |||||||
| Apple Inc. | — | 40.91 | 31.36 | 27.21 | 22.40 | 26.45 | |
| Arista Networks Inc. | — | 39.60 | 33.39 | 39.01 | 89.98 | 38.47 | |
| Dell Technologies Inc. | 12.53 | 29.51 | 13.99 | 34.88 | 6.45 | 9.28 | |
| Lumentum Holdings Inc. | 239.89 | — | — | 72.26 | 14.52 | 8.11 | |
| Super Micro Computer Inc. | — | 16.54 | — | 21.06 | — | 25.04 | |
| EV/FCFF, Sector | |||||||
| Technology Hardware & Equipment | — | 37.81 | 30.41 | 24.97 | 20.80 | 23.54 | |
| EV/FCFF, Industry | |||||||
| Information Technology | — | 43.70 | 39.04 | 33.99 | 26.47 | 27.37 | |
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).
3 2026 Calculation
EV/FCFF = EV ÷ FCFF
= 445,171 ÷ 13,928 = 31.96
4 Click competitor name to see calculations.
The Enterprise Value to Free Cash Flow to the Firm (EV/FCFF) ratio exhibits significant volatility over the analyzed period, characterized by an initial compression followed by a substantial expansion. While the ratio reached a minimum of 10.98 in 2023, it climbed sharply to 31.96 by 2026, signaling a marked increase in the valuation multiple relative to the firm's cash generation capacity.
- Enterprise Value Trends
- Enterprise value experienced a fluctuation in the early period, decreasing from 234,167 million USD in 2021 to 176,666 million USD in 2022. This was followed by a recovery and a period of relative stability between 2023 and 2024. However, a sharp upward trajectory is observed in the final two years, with the value escalating to 279,496 million USD in 2025 and peaking at 445,171 million USD in 2026.
- Free Cash Flow to the Firm (FCFF) Performance
- Cash flow generation demonstrates inconsistency throughout the timeframe. FCFF peaked in 2023 at 19,346 million USD before suffering a significant contraction to 10,702 million USD in 2024. Although a partial recovery occurred in 2025, the figures remained relatively stagnant through 2026, ending at 13,928 million USD, which is lower than the 2021 baseline.
- EV/FCFF Ratio Interpretation
- The valuation multiple trend is bifurcated. From 2021 to 2023, the ratio declined from 15.50 to 10.98, suggesting either a contraction in market valuation or an increase in cash flow efficiency. Conversely, from 2024 onward, the ratio rose aggressively. The spike to 31.96 in 2026 is primarily driven by the rapid acceleration of enterprise value while FCFF remained comparatively flat, indicating that the market is pricing in significant future growth that is not yet reflected in the current free cash flow.
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