Return on Capital (ROC)
Return on capital (ROC) is after tax rate of return on net business assets. ROIC is unaffected by changes in interest rates or company debt and equity structure. It measures business productivity performance.
Return on Invested Capital (ROIC)
Cisco Systems Inc., ROIC calculation, comparison to benchmarks
| Jul 27, 2024 | Jul 29, 2023 | Jul 30, 2022 | Jul 31, 2021 | Jul 25, 2020 | Jul 27, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | 12,178) | 12,636) | 12,468) | 11,686) | 12,905) | 9,686) | |
| Invested capital2 | 91,785) | 58,979) | 59,063) | 57,460) | 53,498) | 53,469) | |
| Performance Ratio | |||||||
| ROIC3 | 13.27% | 21.42% | 21.11% | 20.34% | 24.12% | 18.12% | |
| Benchmarks | |||||||
| ROIC, Competitors4 | |||||||
| Apple Inc. | 183.43% | 156.53% | 217.85% | 214.07% | 161.85% | 105.51% | |
| Arista Networks Inc. | — | 43.29% | 38.75% | 53.73% | 36.06% | 41.53% | |
| Super Micro Computer Inc. | — | 25.75% | 14.13% | 8.04% | 5.68% | 10.74% | |
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 NOPAT. See details »
2 Invested capital. See details »
3 2024 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 12,178 ÷ 91,785 = 13.27%
4 Click competitor name to see calculations.
| Performance ratio | Description | The company |
|---|---|---|
| ROIC | A measure of the periodic, after tax, cash-on-cash yield earned in the business. | Cisco Systems Inc. ROIC improved from 2022 to 2023 but then deteriorated significantly from 2023 to 2024. |
Decomposition of ROIC
Cisco Systems Inc., decomposition of ROIC
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 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
The primary reason for the decrease in return on invested capital (ROIC) over 2024 year is the decrease in efficiency measured by turnover of capital (TO) ratio.
Operating Profit Margin (OPM)
Cisco Systems Inc., OPM calculation, comparison to benchmarks
| Jul 27, 2024 | Jul 29, 2023 | Jul 30, 2022 | Jul 31, 2021 | Jul 25, 2020 | Jul 27, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | 12,178) | 12,636) | 12,468) | 11,686) | 12,905) | 9,686) | |
| Add: Cash operating taxes2 | 2,835) | 4,688) | 2,953) | 3,009) | 2,718) | 3,216) | |
| Net operating profit before taxes (NOPBT) | 15,014) | 17,324) | 15,421) | 14,696) | 15,623) | 12,902) | |
| Revenue | 53,803) | 56,998) | 51,557) | 49,818) | 49,301) | 51,904) | |
| Add: Increase (decrease) in deferred revenue | 2,925) | 2,286) | 1,100) | 1,718) | 1,979) | (1,218) | |
| Adjusted revenue | 56,728) | 59,284) | 52,657) | 51,536) | 51,280) | 50,686) | |
| Profitability Ratio | |||||||
| OPM3 | 26.47% | 29.22% | 29.29% | 28.52% | 30.47% | 25.46% | |
| Benchmarks | |||||||
| OPM, Competitors4 | |||||||
| Apple Inc. | 31.84% | 29.83% | 30.44% | 30.11% | 24.73% | 24.69% | |
| Arista Networks Inc. | — | 43.42% | 37.18% | 37.40% | 32.62% | 33.40% | |
| Super Micro Computer Inc. | — | 11.58% | 7.18% | 3.35% | 2.63% | 4.41% | |
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 NOPAT. See details »
2 Cash operating taxes. See details »
3 2024 Calculation
OPM = 100 × NOPBT ÷ Adjusted revenue
= 100 × 15,014 ÷ 56,728 = 26.47%
4 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| OPM | The operating profit margin (OPM) is the ratio of pretax economic earnings, or NOPBT, to sales. | Cisco Systems Inc. OPM deteriorated from 2022 to 2023 and from 2023 to 2024. |
Turnover of Capital (TO)
Cisco Systems Inc., TO calculation, comparison to benchmarks
| Jul 27, 2024 | Jul 29, 2023 | Jul 30, 2022 | Jul 31, 2021 | Jul 25, 2020 | Jul 27, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Revenue | 53,803) | 56,998) | 51,557) | 49,818) | 49,301) | 51,904) | |
| Add: Increase (decrease) in deferred revenue | 2,925) | 2,286) | 1,100) | 1,718) | 1,979) | (1,218) | |
| Adjusted revenue | 56,728) | 59,284) | 52,657) | 51,536) | 51,280) | 50,686) | |
| Invested capital1 | 91,785) | 58,979) | 59,063) | 57,460) | 53,498) | 53,469) | |
| Efficiency Ratio | |||||||
| TO2 | 0.62 | 1.01 | 0.89 | 0.90 | 0.96 | 0.95 | |
| Benchmarks | |||||||
| TO, Competitors3 | |||||||
| Apple Inc. | 7.82 | 6.36 | 8.46 | 8.61 | 7.63 | 5.12 | |
| Arista Networks Inc. | — | 1.32 | 1.45 | 1.70 | 1.28 | 1.36 | |
| Super Micro Computer Inc. | — | 2.95 | 2.35 | 2.77 | 2.69 | 3.09 | |
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 Invested capital. See details »
2 2024 Calculation
TO = Adjusted revenue ÷ Invested capital
= 56,728 ÷ 91,785 = 0.62
3 Click competitor name to see calculations.
| Efficiency ratio | Description | The company |
|---|---|---|
| TO | The turnover of capital (TO) is the ratio of sales to invested capital. Capital turnover is a function of the efficiency of working capital management and of net fixed assets. | Cisco Systems Inc. TO improved from 2022 to 2023 but then deteriorated significantly from 2023 to 2024. |
Effective Cash Tax Rate (CTR)
Cisco Systems Inc., CTR calculation, comparison to benchmarks
| Jul 27, 2024 | Jul 29, 2023 | Jul 30, 2022 | Jul 31, 2021 | Jul 25, 2020 | Jul 27, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | 12,178) | 12,636) | 12,468) | 11,686) | 12,905) | 9,686) | |
| Add: Cash operating taxes2 | 2,835) | 4,688) | 2,953) | 3,009) | 2,718) | 3,216) | |
| Net operating profit before taxes (NOPBT) | 15,014) | 17,324) | 15,421) | 14,696) | 15,623) | 12,902) | |
| Tax Rate | |||||||
| CTR3 | 18.88% | 27.06% | 19.15% | 20.48% | 17.40% | 24.92% | |
| Benchmarks | |||||||
| CTR, Competitors4 | |||||||
| Apple Inc. | 26.37% | 17.45% | 15.42% | 17.39% | 14.22% | 16.57% | |
| Arista Networks Inc. | — | 24.58% | 28.06% | 15.61% | 13.60% | 8.55% | |
| Super Micro Computer Inc. | — | 24.68% | 16.27% | 13.44% | 19.78% | 21.16% | |
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 NOPAT. See details »
2 Cash operating taxes. See details »
3 2024 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 2,835 ÷ 15,014 = 18.88%
4 Click competitor name to see calculations.
| Tax rate | Description | The company |
|---|---|---|
| CTR | Effective cash tax rate on operating income. | Cisco Systems Inc. CTR increased from 2022 to 2023 but then decreased significantly from 2023 to 2024. |