Cisco Systems Inc., FCFE calculation

US$ in millions

12 months ended:	Jul 27, 2024	Jul 29, 2023	Jul 30, 2022	Jul 31, 2021	Jul 25, 2020	Jul 27, 2019
Net income	10,320)	12,613)	11,812)	10,591)	11,214)	11,621)
Net noncash charges	4,858)	2,231)	3,136)	2,879)	3,294)	3,133)
Change in operating assets and liabilities, net of effects of acquisitions and divestitures	(4,298)	5,042)	(1,722)	1,984)	918)	1,077)
Net cash provided by operating activities	10,880)	19,886)	13,226)	15,454)	15,426)	15,831)
Acquisition of property and equipment	(670)	(849)	(477)	(692)	(770)	(909)
Short-term borrowings, original maturities of 90 days or less, net	478)	(602)	606)	(5)	(3,470)	3,446)
Issuances of debt	31,818)	—)	1,049)	—)	—)	2,250)
Repayments of debt	(9,826)	(500)	(3,550)	(3,000)	(6,720)	(6,780)
Repayments of Splunk convertible debt, net of capped call proceeds	(3,140)	—)	—)	—)	—)	—)
Free cash flow to equity (FCFE)	29,540)	17,935)	10,854)	11,757)	4,466)	13,838)

Based on: 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), 10-K (reporting date: 2020-07-25), 10-K (reporting date: 2019-07-27).

Operating Cash Flow: The net cash provided by operating activities remained relatively stable from 2019 to 2021, with values around 15,000 million US dollars. A decline was observed in 2022, dropping to approximately 13,226 million US dollars. This was followed by a significant increase to nearly 19,886 million US dollars in 2023, before falling sharply to 10,880 million US dollars in 2024.
Free Cash Flow to Equity (FCFE): The FCFE exhibited considerable fluctuations over the period. It started at 13,838 million US dollars in 2019 but dropped notably to 4,466 million US dollars in 2020. A recovery phase occurred in 2021 and 2022, with FCFE values increasing to 11,757 million and 10,854 million US dollars, respectively. A strong upward trend was observed in 2023 and 2024, with FCFE values reaching 17,935 million and peaking at 29,540 million US dollars, respectively.
Summary of Trends: While operating cash flow demonstrated some volatility with both declines and recoveries, the FCFE showed greater variability but ended the period with substantial growth. This indicates an improvement in the company's ability to generate cash available to equity shareholders, even as operational cash flows experienced fluctuations. The strong increase in FCFE in recent years suggests enhanced financial flexibility or changes in capital expenditure, financing, or working capital management.

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Cisco Systems Inc., current P/FCFE calculation, comparison to benchmarks

No. shares of common stock outstanding	3,959,998,180
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions)	29,540)
FCFE per share	7.46
Current share price (P)	68.59
Valuation Ratio
P/FCFE	9.19
Benchmarks
P/FCFE, Competitors¹
Apple Inc.	30.86
Arista Networks Inc.	34.55
Dell Technologies Inc.	150.49
Super Micro Computer Inc.	—
P/FCFE, Sector
Technology Hardware & Equipment	26.75
P/FCFE, Industry
Information Technology	45.64

Based on: 10-K (reporting date: 2024-07-27).

¹ Click competitor name to see calculations.

If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.

Cisco Systems Inc., historical P/FCFE calculation, comparison to benchmarks

	Jul 27, 2024	Jul 29, 2023	Jul 30, 2022	Jul 31, 2021	Jul 25, 2020	Jul 27, 2019
No. shares of common stock outstanding¹	3,990,734,794	4,054,857,783	4,108,844,167	4,217,735,917	4,233,425,297	4,245,290,230
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions)²	29,540)	17,935)	10,854)	11,757)	4,466)	13,838)
FCFE per share³	7.40	4.42	2.64	2.79	1.05	3.26
Share price^1, 4	49.13	56.79	45.37	58.60	40.95	48.42
Valuation Ratio
P/FCFE⁵	6.64	12.84	17.18	21.02	38.82	14.85
Benchmarks
P/FCFE, Competitors⁶
Apple Inc.	32.77	30.63	22.26	23.27	24.40	21.64
Arista Networks Inc.	35.65	41.51	96.72	42.05	32.99	—
Dell Technologies Inc.	32.94	9.06	33.54	14.15	5.64	—
Super Micro Computer Inc.	—	41.38	139.27	13.81	—	7.83
P/FCFE, Sector
Technology Hardware & Equipment	27.62	27.42	22.22	22.84	24.15	—
P/FCFE, Industry
Information Technology	36.66	33.16	26.84	27.24	23.37	—

Based on: 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), 10-K (reporting date: 2020-07-25), 10-K (reporting date: 2019-07-27).

¹ Data adjusted for splits and stock dividends.

² See details »

³ 2024 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 29,540,000,000 ÷ 3,990,734,794 = 7.40

⁴ Closing price as at the filing date of Cisco Systems Inc. Annual Report.

⁵ 2024 Calculation
P/FCFE = Share price ÷ FCFE per share
= 49.13 ÷ 7.40 = 6.64

⁶ Click competitor name to see calculations.

Share Price Trends: The share price exhibited notable volatility over the examined periods. Starting at $48.42 in mid-2019, it declined to $40.95 by mid-2020, followed by a recovery to $58.60 in mid-2021. Subsequently, the price dropped again to $45.37 in mid-2022, increased to $56.79 in mid-2023, and then decreased to $49.13 by mid-2024. Overall, the share price shows cyclical movement with peaks in mid-2021 and mid-2023 and troughs in mid-2020 and mid-2022, with a moderate decline noted by mid-2024.
Free Cash Flow to Equity (FCFE) per Share: The FCFE per share displayed significant fluctuations with an overall upward trajectory. It commenced at $3.26 in mid-2019, dropped sharply to $1.05 in mid-2020, partially recovered to $2.79 in mid-2021, and slightly decreased to $2.64 in mid-2022. Thereafter, a substantial increase was observed, rising to $4.42 in mid-2023, and further accelerating to $7.40 by mid-2024. This indicates an improvement in the company’s ability to generate cash available to equity shareholders over the latest two years.
Price to FCFE Ratio (P/FCFE): The P/FCFE ratio experienced a pronounced decline over the timeframe, suggesting enhanced valuation attractiveness relative to FCFE. Initially, the ratio was 14.85 in 2019, spiked dramatically to 38.82 in 2020, indicating a significant rise in share price relative to FCFE or decreased FCFE per share. Post-2020, the ratio steadily declined to 21.02 in 2021, 17.18 in 2022, 12.84 in 2023, and reached a low of 6.64 by mid-2024. This decreasing trend reflects either growing FCFE per share, a reduction in share price multiples, or a combination of both, which may signal an improved investment value proposition over time.

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Cisco Systems Inc. (NASDAQ:CSCO)

Price to FCFE (P/FCFE)

Free Cash Flow to Equity (FCFE)

Price to FCFE Ratio, Current

Price to FCFE Ratio, Historical