Analysis of Cisco System annual report
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1. Cisco Systems (stock symbol: CSCO) uses PriceWaterhouseCoopers LLP as its independent accountants (Cisco Systems, 2000, p. 46).2. According to PriceWaterhouseCoopers, the financial statements were prepared in accordance with generally accepted accounting principles as practiced in the USA, and the accountants believe that the company does not appear to have deliberately misrepresented its financial position (Cisco Systems, 2000, p. 46). 3. The external audit checks that the steps used to develop financial data issued by a company are valid and in keeping with standard accounting and control practices. External auditors look for irregularities in reporting practices to determine that the information on financial statements is fundamentally valid. The accuracy of the data is not considered by the auditors, only the procedures used to arrive at the data. 4. An auditor's report stating that financial statements have been prepared in accordance with generally accepted accounting principles tells readers that the financial statements are probably an accurate representation of the company's financial position. If an audit report states that there are irregularities, investors and creditors will immediately lose confidence in the company's ability to continue as a viable operation. For the corporation, an audit report that gives the opinion that the financial statements are an accurate representation of the business means that the company's personnel can use those financia
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tems has a paid-in capital value of $14,602 (calculated as common stock and paid-in capital less the par value of outstanding shares) (Cisco Systems, 2000, p. 28).
10. The average price per share received by the company for all common stock can be calculated by taken the company's value of common stock and paid-in capital ($14,609,000,000) (Cisco Systems, 2000, p. 28) and dividing by the number of shares issued (7,438,000,000) (Cisco Systems, 2000, p. 25) yielding an average price of $1.9641032.
11. Information from the company's financial statements is summarized below (Cisco Systems, 2000, pp. 25-27) and used in the calculation of financial ratios.
Balance Sheet ($Millions)
2000
1999
Cash
4234
913
A/R
2299
1250
Inventory
1232
658
Other Current Assets
3345
1940
Current Assets
11110
4761
PPE (net)
1426
825
Other
20334
9307
Total Assets
32870
14893
Notes, A/P
739
374
Current Portion LT Debt
0
0
Accrued Compensation
1317
679
Other Current
3140
1985
Current Liabilities
5196
3038
LT Debt
0
0
Other Liabiliti
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