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Return on Common Equity for Cisco Systems Inc

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CSCO: Cisco Systems Inc

Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol based networking and other products related to the communications and information technology industry in the Americas, Europe, th...

60.94 USD
Price
USD
Fair Value
Upside
44.50 - 66.50
52-week range

Analysis

How does Cisco's Return on Common Equity benchmark against competitors?

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We've identified the following companies as similar to Cisco Systems Inc because they operate in a related industry or sector. We also considered size, growth, and various financial metrics to narrow down the list to the ones listed below.

Metric Usage: Return on Common Equity

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roe
Slug
number
Datatype
text
Format
current
Default Period
FY, LTM
Periods Supported
Free
Plan

To view the full list of supported financial metrics please see Complete Metrics Listing.

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Metrics similar to Return on Common Equity in the efficiency category include:

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Return on Common Equity

A ratio used to measure the return that a firm generates on the book value of common equity.

Definition of Return on Common Equity

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Return on Common Equity is defined as:

Return on Common Equity = Net Income To Common / Average Total Common Equity

Return on Common Equity for Cisco Systems is calculated as follows:

Net Income [ 9.187 B ]
(/) Average Equity over Period [ 45.891 B ]
(=) Return on Common Equity [ 20.0% ]

The tables below summarizes the trend in Cisco Systems’s return on common equity over the last five years:

Fiscal Year Net Income Average Common Equity Return on Common Equity
2020-07-25 11.214 B 35.745 B 31.4%
2021-07-31 10.591 B 39.597 B 26.7%
2022-07-30 11.812 B 40.524 B 29.1%
2023-07-29 12.613 B 42.063 B 30.0%
2024-07-27 10.32 B 44.905 B 23.0%

Return on equity represents the percentage return a company generates on the money shareholders have invested.

The Net Income used in the numerator is often adjusted for one-time and non-recurring items to present a clearer view of future earnings. Since income is earned over the course of a year, we average book value of Common Equity at the start and end of the year for the denominator.

In general, a higher return on equity suggests management is utilizing the capital invested by shareholders efficiently.


Click the link below to download a spreadsheet with an example Return on Common Equity calculation for Cisco Systems Inc below:

Sector Benchmark Analysis

Sector
Industry Group
Industry
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-880.2%-580.2%-280.2%81.9%0400800

The chart above depicts the distribution of return on common equity for companies operating in the Information Technology sector in the Developed economic region. Over 2,320 companies were considered in this analysis, and 2,231 had meaningful values. The average return on common equity of companies in the sector is -27.4% with a standard deviation of 102.3%.

Cisco Systems Inc's Return on Common Equity of 20.0% ranks in the 86.7% percentile for the sector. The following table provides additional summary stats:

Return on Common Equity In The Information Technology Sector
Economic Risk RegionDeveloped
Total Constituents2,322
Included Constituents2,231
Min-920.3%
Max62.2%
Median3.2%
Mean-27.4%
Standard Deviation102.3%

You can find companies with similar return on common equity using this stock screener.

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