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Financial Analysis of Cisco: Profitability, Liquidity, Solvency and Market-Based Ratios

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Added on  2023-06-04

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This article provides a comprehensive financial analysis of Cisco, including profitability, liquidity, solvency, and market-based ratios. The analysis helps investors make informed decisions about holding, buying, or selling Cisco stocks. The article includes a table of financial ratios, technical analysis of Cisco's stock price, and a recommendation for investors.

Financial Analysis of Cisco: Profitability, Liquidity, Solvency and Market-Based Ratios

   Added on 2023-06-04

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Running head: FINANCE
Finance
Name of the Student:
Name of the University:
Authors Note:
Financial Analysis of Cisco: Profitability, Liquidity, Solvency and Market-Based Ratios_1
FINANCE
1
Table of Contents
Introduction:...............................................................................................................................2
Analysis:.....................................................................................................................................2
Recommendation and Conclusion:............................................................................................6
Reference and Bibliography:......................................................................................................7
Financial Analysis of Cisco: Profitability, Liquidity, Solvency and Market-Based Ratios_2
FINANCE
2
Introduction:
The assessment aims in detecting the current financial position of Cisco, which could
allow investors to make relevant investment decisions to hold, buy or sell the stocks. In
addition, the evaluation also helps in detecting the current trajectory of the stock, which
might allow investors to understand the current financial trend and make adequate investment
decision. The financial ratios are also evaluated to understand the improvement in current
financial position of the company. The use of technical analysis is also conducted for
analysing the current trend and the returns, which can be generated from investment.
Analysis:
PROFITABILITY
RATIOS Formula 2017 2016 2015 2014
Net Profit Margin Net profit / sales
20.0
2%
21.8
1%
18.7
1%
15.9
5%
Gross Profit Margin Gross profit / sales
62.9
6%
62.8
7%
61.8
3%
56.3
9%
LIQUIDITY RATIOS Formula 2017 2016 2015 2014
Current ratio
Current Assets / Current
Liabilities 3.03 3.16 3.23 3.39
Quick ratio
Quick Assets / Current
Liabilities 2.98 3.11 3.16 3.31
LONG-TERM
SOLVENCY RATIOS Formula 2017 2016 2015 2014
Debt to equity
Total liabilities / total
shareholders’ equity 0.96 0.91 0.90 0.85
Debt ratio Total liabilities / total assets 0.49 0.48 0.47 0.46
Leverage ratio
Total assets / total shareholders’
equity 1.96 1.91 1.90 1.85
MARKET-BASED
RATIOS Formula 2017 2016 2015 2014
Price/Earnings
Market price per share /
earnings per share
16.5
9
12.5
4
16.2
3
15.2
4
Price to Book ratio Market Value per Share / Book
Financial Analysis of Cisco: Profitability, Liquidity, Solvency and Market-Based Ratios_3

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