2024 Cash Flow Analysis for Cisco Systems, Inc. CSCO

Cisco Systems, Inc. is a multinational technology company that designs, manufactures, and sells networking hardware, telecommunications equipment, and other high-technology services and products. The company is headquartered in San Jose, California, and was founded in 1984. Cisco is known for its extensive range of networking solutions, including routers, switches, and cybersecurity products, as well as its software and services that enhance connectivity and security.

The cash flow statement is a financial document that provides insights into how much cash or cash equivalents a company has generated and used during a specific period. It is divided into three sections: operating activities, investing activities, and financing activities. This statement is crucial for investors and analysts as it reveals how a company manages its cash resources.

How to read the chart

The chart above illustrates the cash flow of Cisco Systems in 2024. The width of the bars represents the amount of cash flow, with wider bars indicating larger amounts.

We start on the left with Cisco's cash position at the beginning of the year. During the year, the cash balance decreased, indicating that cash was utilized for financing and investing activities. The cash flow from operating activities is the largest source of cash, while investing activities show a significant cash outflow.

The cash flow from investing activities is negative, indicating that the company spent more on new investments than it received from selling assets or investments. The cash flow from financing activities is positive, reflecting that the company raised more cash through activities such as issuing debt or equity than it paid out for debt repayments or dividends.

After accounting for the change in cash, we end on the right with the company's cash position at the end of the year.

Real-Time Cash Flow Counter

To give a sense of the scale of Cisco Systems' cash flow, we have created a real-time counter that simulates the company's cash flow for 2024. The counter starts when you scroll to this section and runs at the same speed as the company's reported cash flow.

This is not a live counter of real cash flows as they happen, but a simulation based on the company's reported cash flow for 2024. The counter is meant to provide a sense of the scale of the company's cash flow and how quickly it moves.

Cash Flow Statement

In 2024, Cisco Systems generated $10,880 million in cash from operating activities, spent $20,478 million on investing activities, and raised $6,844 million from financing activities. Consequently, the company's cash balance decreased by $2,785 million during the year.

The company's beginning cash balance was $11,627 million, which typically includes cash and cash equivalents, such as short-term investments that can be easily converted into cash. The company's ending cash balance was $8,842 million.

The company's capital expenditures for the year were $670 million. This amount represents the cash spent on investments in property, plant, and equipment. Subtracting capital expenditures from cash flow from operations gives the company's free cash flow, which was $10,210 million in 2024. This amount represents the cash available to pay dividends, repurchase stock, or make other investments.

Summary

Cisco Systems' cash flow activities in 2024 highlight a robust generation of cash from operating activities, which is a positive indicator of its core business performance. However, the substantial outflow in investing activities suggests significant investments in growth and expansion, possibly in new technologies or infrastructure. The positive cash flow from financing activities indicates that the company effectively managed its financial obligations and capital structure, possibly through strategic debt issuance or equity financing. Despite the decrease in overall cash balance, the company maintains a strong free cash flow, providing flexibility for future strategic initiatives.