The business behind the dividend
| Measure | CSCO | Median | Formula |
|---|---|---|---|
| Return on equity | 21.7% | 11.7% | Net income ÷ shareholders’ equity |
| Return on capital employed | 16.5% | 10.1% | Operating income ÷ (equity + total debt) |
| Owner earnings | $9.97bn | $632.00m | Net income + depreciation & amortisation − capital expenditure |
| Free cash flow | $13.29bn | $746.10m | Operating cash flow − capital expenditure |
| Operating margin | 20.8% | 15.0% | Operating income ÷ revenue |
| Net margin | 18.0% | 10.2% | Net income ÷ revenue |
| Debt to equity | 0.53x | 0.79x | Total debt ÷ shareholders’ equity |
| Interest cover | 7.38x | 4.43x | Operating income ÷ interest expense |
| Current ratio | 1.00x | 1.25x | Current assets ÷ current liabilities |
| Long-term debt to working capital | — | — | Long-term debt ÷ (current assets − current liabilities) |
| Cash conversion | 1.39x | 1.78x | Operating cash flow ÷ net income |
Not computed here: Long-term debt to working capital — why a blank is not a zero.
Ten years of it
The same measures, for every year the filings support. One year is a fact; a row is a business.
| Measure | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | Median |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Return on equity | 21.7% | 22.7% | 28.4% | 29.7% | 25.7% | 29.6% | 34.6% | 0.3% | 14.5% | 16.9% | 22.7% |
| Return on capital employed | 16.5% | 18.6% | 28.5% | 28.7% | 24.3% | 25.9% | 26.3% | 17.9% | 12.4% | 13.7% | 18.6% |
| Operating margin | 20.8% | 22.6% | 26.4% | 27.1% | 25.8% | 27.6% | 27.4% | 25.0% | 24.9% | 25.7% | 25.7% |
| Net margin | 18.0% | 19.2% | 22.1% | 22.9% | 21.3% | 22.7% | 22.4% | 0.2% | 20.0% | 21.8% | 21.3% |
| Debt to equity | 0.53x | 0.44x | 0.19x | 0.22x | 0.28x | 0.38x | 0.61x | 0.59x | 0.46x | 0.45x | 0.44x |
| Current ratio | 1.00x | 0.91x | 1.38x | 1.43x | 1.49x | 1.72x | 1.51x | 2.29x | 3.03x | 3.16x | 1.49x |
| Cash conversion | 1.39x | 1.05x | 1.58x | 1.12x | 1.46x | 1.38x | 1.36x | — | 1.44x | 1.26x | 1.38x |
How it compares in technology
Among the 42 technology companies here measured on free cash flow, Cisco Systems pays out less than 9 of them. The median for that group is 28.6%, against this company’s 48.4%.
Closest on free cash flow
- Analog Devices (ADI) 45.0%
- Audiocodes (AUDC) 47.8%
- Automatic Data Processing (ADP) 50.1%
- International Business Machines (IBM) 51.7%
Same sector and same denominator, so the figures are comparable. All 46 in technology →