FIN 515 Managerial Finance Week 3 First Course Project Answer

1062 Words Aug 2nd, 2015 5 Pages
First Course Project

For this course project, I have chosen Cisco Systems, Inc. and tried to do the DuPont analysis for this company. Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol (IP) based networking products and services related to the communications and information technology industry worldwide. Cisco also provides broad line of products for transporting data, voice, and video within buildings, across campuses, and around the world. Various products offered by Cisco are switching, NGN routing, collaboration portfolio integrating voice, video, data and mobile applications data center and other networking products. Cisco Systems has a market cap of $128.77 billion and is part of the technology sector and
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Depreciation and amortization are computed using the straight-line method, generally over the following periods. Cisco Systems Inc.'s property and equipment, gross increased from 2012 to 2013 and from 2013 to 2014. Cisco Systems Inc.'s ROE improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014. Cisco’s ROE is 13.9 % in 2014 which is significantly less as compared to some of the competitor. Also, in 2013 and 2012, Cisco’s ROE is not only less than its competitors but is also less than the industry or sector average. Cisco Systems Inc.'s ROA improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014. Return on equity has decreased from 2013, mainly attributed to lower net profit margins, likely due to increased competition, and lower asset turnover ratios due to increase in total assets in 2013 and 2014. Return on equity remains lower than the Networking & Communication Devices industry average and we see the ratio expanding as management’s initiative to become more efficient. Cisco is also trying to lower unnecessary fixed assets and improve bottom line margins. Cisco's revenue decline is expected to turn around in fiscal year 2015 as the company is trying to expand beyond its flagship networking products. The company is known for equipment used to connect computers to each

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