Cisco Systems Inc. (CSCO)

Price to FCFE (P/FCFE)

Difficulty: Intermediate

Cisco Systems Inc., FCFE calculation

USD $ in millions

	12 months ended	Jul 28, 2018	Jul 29, 2017	Jul 30, 2016	Jul 25, 2015	Jul 26, 2014	Jul 27, 2013
	Net income
	Net noncash charges
	Change in operating assets and liabilities, net of effects of acquisitions and divestitures
	Net cash provided by operating activities
	Acquisition of property and equipment
	Proceeds from sales of property and equipment
	Short-term borrowings, original maturities less than 90 days, net
	Issuances of debt
	Repayments of debt
	Free cash flow to equity (FCFE)

Item	Description	The company
FCFE	Free cash flow to equity is the cash flow available to Cisco Systems Inc.’s equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made.	Cisco Systems Inc.’s FCFE increased from 2016 to 2017 but then declined significantly from 2017 to 2018.

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

No. shares of common stock outstanding
Selected Financial Data (USD $)
Free cash flow to equity (FCFE) (in millions)
FCFE per share
Current share price (P)
Ratio
P/FCFE
Benchmarks
P/FCFE, Competitors
Apple Inc.
Applied Materials Inc.
Broadcom Inc.
HP Inc.
Intel Corp.
NVIDIA Corp.
Qualcomm Inc.
Texas Instruments Inc.
P/FCFE, Sector
Technology Hardware & Equipment
P/FCFE, Industry
Technology

If company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.

Otherwise, if 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 28, 2018	Jul 29, 2017	Jul 30, 2016	Jul 25, 2015	Jul 26, 2014	Jul 27, 2013
	No. shares of common stock outstanding¹
	Selected Financial Data (USD $)
	Free cash flow to equity (FCFE) (in millions)²
	FCFE per share⁴
	Share price^1, 3
	Ratio
	P/FCFE⁵
	Benchmarks
	P/FCFE, Competitors
	Apple Inc.
	Applied Materials Inc.
	Broadcom Inc.
	HP Inc.
	Intel Corp.
	NVIDIA Corp.
	Qualcomm Inc.
	Texas Instruments Inc.
	P/FCFE, Sector
	Technology Hardware & Equipment
	P/FCFE, Industry
	Technology

¹ Data adjusted for splits and stock dividends.

³ Close price on the filing date of Cisco Systems Inc.’s Annual Report.

2018 Calculations

⁴ FCFE per share = FCFE ÷ No. shares of common stock outstanding
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⁵ P/FCFE = Share price ÷ FCFE per share
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Ratio	Description	The company
P/FCFE	Price to free cash flow to equity is cash valuation indicator of stockholders’ equity.	Cisco Systems Inc.’s P/FCFE ratio declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.

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

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Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality