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Main sections of the report
The annual report is aimed at providing the overview of the performance of the business with potential investors, investors and some other stakeholders. The annual report of the company gives the summary of the company in the period of the last 12 months; it is to provide the financial data of the year. The mains sections of the annual report are the provided financial statements, analysis and the discussion of the management.
The overall financial statements of the company have a positive and increasing net income for the three years 2011, 2012 and 2013. The net income increased from $6490 to $8041 and finally to $9983 in the year ending July 27th, 2013. The financial statement can be of importance to all the stakeholders since it gives them an overview on how the Cisco Company is progressing (Cisco Systems, Inc. 2014).
The management found out that in the fiscal 2014 there was a decrease in the product revenue by $1.5billion, this decline was highly significant in the market of the service providers. They discussed that in order for the company to improve, they need to make more investment more on their portfolio that include the data centre, cloud, software and security, services and rebalance all their resources in the fiscal 2014. To this effect they made an announcement in the reduction of the workforce that will have impact on their 6000 employees around the globe. They believe that all these actions will put the company in a position to invest in the growth opportunities.
Key factors that influence the financial performance of the company
The financial performance of the company was influenced by the factors such as the reduction in the spending by the service provider consumers or customers; this resulted in low income generated by the company since the customers reduced their spending on the services that were provided by the company. They also experienced weakness in some of the emerging countries; this lowered the revenue that was generated in that year. Some of their customers also embraced the use of a conservative approach in the capital spending that is related to IT, this also had a negative performance on the financial status of the company.
Primary assets held by the company
The company has both tangible and intangible assets; the tangible assets include the physical infrastructure that the company possesses for example its building their headquarters at San Jose California. The other category that constitutes a higher percentage of the company’s intangible assets is the cloud.
Financial analysis of the current and previous year's financial position
A measure of short-term debt-paying ability and a measure of investor's expectations about the company's future prospects
The current ratio is above 1, this indicates that the company has a good performance in terms of the finances. However, the current ration of above 3 indicated that the company may not be effectively using its current assets. This can also indicate that the company did not manage the working capital in a good way. The price earning ration is indicated in the table above, this can be interpreted as , the investor has the willing ability to pay 13.66 and 17.31 for $1 of the current earnings in the year ending July 2013 and 2014 (Cisco Systems, Inc. 2013).
Sources
Cisco Systems, Inc. 2014 Annual Report, CISCO
Cisco Systems, Inc. 2013 Annual Report, CISCO
