Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Fundamental Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (4686)	7/3/2025 10:41:59 AM
From: bruwin	1 Recommendation Recommended By E_K_S Read Replies (1) \| Respond to of 4719

As a matter of interest, I asked DEEPSEEK for answers to Items (1) to (4) related to the sort of info I put into my EXCEL spreadsheet. I asked PERPLEXITY the same questions. It could not provide as comprehensive an answer. It couldn't, for example, answer (2) and (3) -----> Question to DEEPSEEK :- *WHICH OF ITEMS (1) TO (4) DOES CSCO EQUAL OR EXCEED (1) GROSS PROFIT/REVENUE >30%, (2) SG&A <30%GROSS PROFIT, (3) INTEREST EXPENSE <15%EBITDA, (4) NET EARNINGS >12%REVENUE? Full answer from DEEPSEEK :- To determine which of the four financial criteria Cisco Systems (CSCO) meets or exceeds, we need to analyze its most recent financial data. Here's a step-by-step breakdown based on Cisco's 2023 Annual Report (fiscal year ended July 29, 2023): Key Financial Metrics for CSCO (2023): Revenue: $57.0 billion Gross Profit: $36.6 billion Gross Margin (Gross Profit/Revenue): 64.2% SG&A (Operating Expenses): $11.6 billion EBITDA: ~$17.5 billion (calculated as Operating Income + D&A = $15.6B + $1.9B) Interest Expense: $640 million Net Earnings: $12.6 billion Net Profit Margin (Net Earnings/Revenue): 22.1% Evaluation of Criteria:(1) Gross Profit/Revenue > 30% Calculation: $36.6B / $57.0B = 64.2% Verdict: Exceeds (64.2% >> 30%). (2) SG&A < 30% of Gross Profit Calculation: 30% of Gross Profit = 0.30 × $36.6B = $10.98B Actual SG&A: $11.6B Verdict: Fails ($11.6B > $10.98B, but close). (3) Interest Expense < 15% of EBITDA Calculation: 15% of EBITDA = 0.15 × $17.5B = $2.63B Actual Interest Expense: $0.64B Verdict: Exceeds ($0.64B << $2.63B). (4) Net Earnings > 12% of Revenue Calculation: 12% of Revenue = 0.12 × $57.0B = $6.84B Actual Net Earnings: $12.6B Verdict: Exceeds (22.1% >> 12%). Final Answer:Cisco meets or exceeds criteria (1), (3), and (4), but not (2). (1) Gross Margin: ?? 64.2% > 30% (2) SG&A: ? $11.6B > 30% of Gross Profit ($10.98B) (3) Interest/EBITDA: ?? 3.7% (<15%) (4) Net Profit Margin**: ?? 22.1% > 12%