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Essay / Research Paper Abstract
This 16 page paper in a financial analysis of Cisco using the annual reports from 2001 – 2004. The paper uses a range of ratios to consider the performance of the company and relate the interpretation of the results to shareholders, management and creditors. The bibliography cites 5 sources.
Page Count:
16 pages (~225 words per page)
File: TS14_TEcisco1.rtf
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Unformatted sample text from the term paper:
a shareholder. However, it should also be remembered that it is determined that the primary stakeholder and recipient of the annual accounts is the shareholder. Management will have access to
shorter term and more up to date accounts, but there may not be much more information available to the creditor. Analysis may take place vertically, these ratios compare the
way that a firm is performing against itself, with measures such as profit margins and are calculated vertically form the accents. Horizontal analysis takes place over years, looking at
how the trend have been developing. To examine the well known US high tech company Cisco we will use both forms of analysis. All figures given will be in millions
except the earning per share, unless otherwise stated. All figures are taken from the relevant annual accounts. The first ratio that many people will be interested in is the
gross profit margin. The gross margin is expressed as a percentage. This is the level of revenue that remains when all of the direct costs for producing the goods or
services are deducted form the revenue. This indicates the level at which direct costs account take up revenue. If we look at Cisco we get the following. Gross profit
2001 2002 2003 2004 Revenue 22,293 18,915 18,878 22,045 Cost of goods sold 11,221 6,902 5,645 6,919 Gross profit 11072 12013 13233 15126 Gross profit margin 49.67% 63.51% 70.10% 68.61%
Here we can see there is currently a gross profit margin of 68.61, there has been a general trend upwards whish indicates that there is a good level of
gross profit now with the cost of goods reduced and that this is a very positive trend. If we look at the growth over this period of time the
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