Cisco Systems Inc. (NASDAQ:CSCO)

Current Ratio

The current ratio shows a generally stable pattern from late 2019 through early 2024, fluctuating mostly between 1.3 and 1.8. A gradual decline is noticeable starting around early 2022, with values decreasing from approximately 1.49 to around 1.37 by early 2024. Subsequently, from the quarter ending April 2024 onward, there is a sharp drop in the ratio to below 1, reaching values as low as 0.87, before a modest recovery to 1.0 by mid-2025. This indicates a significant deterioration in short-term liquidity during the most recent periods.

Quick Ratio

The quick ratio trend largely parallels that of the current ratio, remaining relatively steady from 2019 to early 2024 with values fluctuating between roughly 1.1 and 1.6. Starting in early 2022, a downward trend occurs, declining to values near 1.1 by early 2024. From the quarter ending April 2024, there is a notable decline in the quick ratio, falling below 0.7 and reaching as low as 0.64, followed by a slight increase to 0.74 by mid-2025. This suggests a reduction in liquid assets relative to current liabilities in the most recent quarters.

Cash Ratio

The cash ratio exhibits a declining trend from Q4 2019 to Q1 2024, moving from a peak just above 1.1 down to below 0.85. A steep reduction occurs starting in early 2024, with ratios plunging to values around 0.42 to 0.47. This significant drop implies a contraction in the company's cash and cash equivalents relative to its current liabilities, pointing to tightened immediate liquidity in the latest reported periods. A minor improvement is seen toward mid-2025 but remains well below historical levels.

Summary

Overall, the liquidity ratios reveal a relatively stable and healthy liquidity profile through late 2019 to early 2024, with modest declines beginning in early 2022. However, from early 2024 onward, there is a marked deterioration across all three liquidity measures, with current, quick, and cash ratios falling below 1, indicating potential challenges in covering short-term obligations solely with current or liquid assets. The slight recovery toward mid-2025 suggests some improvement but does not fully restore the prior liquidity cushion observed in earlier periods.

The analysis of key liquidity indicators over the observed quarters reveals several important trends and shifts in financial position.

Current Assets

Current assets exhibit fluctuations, with values generally ranging between approximately 32,800 and 43,300 million US dollars. The period shows some peaks, notably in October 2019, July 2023, and January 2024, where current assets reach above 40,000 million. However, a noticeable downward trend emerges toward the latest quarters, as current assets decline from mid-2024 through mid-2025, bottoming out near 32,800 million US dollars before a slight recovery near the end.

Current Liabilities

Current liabilities have experienced an overall increasing trend across the timeline, starting at approximately 24,600 million US dollars in late 2019 and growing steadily to a peak beyond 40,500 million in early to mid-2024. The liability values remain elevated around 40,000 million in subsequent quarters before a modest decrease near mid-2025. This growth in liabilities contrasts with the more variable pattern of current assets.

Current Ratio

The current ratio begins relatively strong, with values around 1.7 to 1.8 in 2019 and early 2020, indicating solid short-term liquidity. However, from 2021 onward, there is a gradual and consistent decline in the ratio. By mid to late 2024, the current ratio falls below 1, reaching a low near 0.87, suggesting a shift toward potential liquidity pressure where current liabilities exceed current assets. The final quarters show a slight recovery back to 1.0, still significantly lower than earlier years.

Overall, the trends indicate a weakening liquidity position over the period analyzed. The increase in current liabilities combined with the less consistent growth in current assets contributes to a declining current ratio. This suggests that the company may be facing increasing short-term financial obligations relative to available liquid resources, especially in the years approaching the 2024-2025 timeframe. The slight upturn in the final quarters may reflect efforts to stabilize or improve liquidity conditions.

Total Quick Assets

The total quick assets demonstrate fluctuations over the analyzed periods, starting at approximately $37.9 billion in late 2019 and showing variability throughout the timeline. There is a noticeable decline around early 2022, with values decreasing from about $31.1 billion to a low near $23.8 billion by mid-2025. Periods in 2023 and early 2024 saw modest recoveries, but the overall trend in the latter part of the dataset reflects a gradual reduction in total quick assets.

Current Liabilities

Current liabilities exhibit an increasing trend with some volatility. Initially, the amount was about $24.6 billion in late 2019, and it generally rose to peak around $40.5 billion during 2024-2025. There are intermittent decreases, for example in late 2021, but the overall pattern indicates a growing liability burden over the years evaluated.

Quick Ratio

The quick ratio starts above 1.5 in 2019, indicating strong short-term liquidity relative to current liabilities. This ratio declines gradually over the periods, falling below 1.2 by the beginning of 2022. A significant drop occurs afterward, reaching values near 0.65 in late 2024, suggesting that quick assets are insufficient to cover current liabilities during this period. The slight improvement toward 0.74 by mid-2025 still reflects weakened liquidity compared to the beginning of the timeline.

Overall Analysis

The financial data imply a deteriorating liquidity position over the analyzed time frame. Despite some fluctuations in quick assets and current liabilities, the increasing liabilities combined with declining quick assets drive the quick ratio downward. This trend may signal challenges in short-term financial health and indicates that the company's ability to meet immediate obligations with quick assets has weakened notably by the end of the period.

The analysis of the quarterly financial data reveals significant developments in cash assets, current liabilities, and liquidity as measured by the cash ratio over the observed periods.

Total Cash Assets

Total cash assets exhibited a generally declining trend starting from approximately $28 billion in late 2019, with fluctuations evident across quarters. Initial stability was observed through early 2021, but a notable decrease occurred thereafter, dropping to around $15.6 billion by late 2025. Some intermittent recoveries were seen, particularly in early 2023 and mid-2023, but these were insufficient to reverse the overall downward direction.

Current Liabilities

Current liabilities showed variability but with a discernible upward tendency. From roughly $24.6 billion at the start of the data period, liabilities fluctuated but increased markedly after 2023, reaching over $40 billion in early 2024 and maintaining a high level through 2025. This rise contrasts with the declining cash assets, signaling growing short-term obligations relative to the company’s liquid assets.

Cash Ratio

The cash ratio, which measures cash assets relative to current liabilities, reflected the interplay between these two items. Initially fluctuating around or above 1.0 until early 2021, the ratio declined steadily thereafter, dropping below 0.5 in 2024 and remaining near this lower range through 2025. This indicates a weakening liquidity position, with cash assets covering less than half of current liabilities in the most recent quarters.

Overall, the data demonstrate a deteriorating liquidity profile, characterized by shrinking cash reserves and expanding short-term liabilities. This trend may raise concerns about the company's ability to meet short-term obligations solely through available cash. The persistent decline in the cash ratio suggests increasing reliance on other forms of liquidity or financing sources beyond cash holdings to support operational and financial needs.