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No. of Recommendations: 104
Hello CSCO fans:

It looks like CSCO beat the earnings number by a penny yet again.

Since I like to do my own calculations, I crunched the Q1 2001 numbers here.

Here's the full earnings press release:
http://biz.yahoo.com/bw/001106/ca_cisco_s.html

Here are my results for CSCO using the 2000 Annual Report numbers.
The annual report can be obtained here:
http://www.cisco.com/warp/public/749/ar2000/

I used the RM Essentials online tool to calculate Annual Report numbers:
http://www.fool.com/seminars/rulemaker/rmessentialstool.htm


RM Essentials Tool – Results

Part 1: Evaluating the Biz

Answer
1) Dominant Brand
Is the company the standout category king within its industry?
Yes

2) Repeat Purchases
Do customers return for purchase at least once a month?
Yes

3) Convenience
Within its industry, is the company's product/service accessibility and convenience the best?
Yes

4) Expanding Possibilities
Can you answer "yes" to the following two questions?
a) Do your friends know about and use the product/service?
b) Is worldwide expansion believable for their stuff?
Yes

5) Your Familiarity and Interest Are you a user of the company's products or at least very familiar with them?
Yes

Part 1 Subtotal points = 5

Part 2 Financials


Standard Actual Result Calculation Points

Sales Growth > 10% 55.5% Sales/Pr. Yr. Sales 2

Gross Margins > 50% 64.36% (Revenue - COGS)/Revenue 2

Net Margins > 7% 14.1% Net Income/Revenue 2

Cash/Debt Ratio > 1.5 No Debt (Cash & Equivalents) 2
---------------------
(ST Debt + LT Debt)

Flow Ratio < 1.25 1.07 (Curr. Assets - Cash & Equiv.) 2
-----------------------------
(Current Liab. - ST Debt)

Cash King Margin > 10% 26.92% (Operating Cash Flow - Cap. Ex.) 2
-----------------------------
Revenue

------------------------------------------------------------------------
Total Score 17

Note, 17 points is a perfect score!

Here are the numbers using the earnings announcement for Q1 2001:
http://biz.yahoo.com/bw/001106/ca_cisco_s.html

No Cash flow Statement is available, so the CKM calculation is omitted.

CSCO Q1 2001 Numbers (in millions of $) using Pro Forma numbers.

Sales = 6519 (3 mo)

Q4 1999 Sales = 3918 (3 mo)


Sales Growth = 66.4% (3 mo)

(Amazing growth for a company this size, and this beats most of the estimates out there, I ask where is the slow down??)

COGS= 2378 (3 mo)

Gross Profit = 4141 (3 mo)


Gross Margin = 63.5% (3 mo)


Net Income (Pro Forma) = 1363 (3 mo)


Net Margin = 20.9% (3 mo)


Cash (and equivalents) = 6391 (more than $6 Billion in the bank!)

Debt = Zilch


Cash/Debt = infinity (no debt)


Current Assets = 11,110

Current Liabilities = 5196


Flow Ratio = (13059-6391)/5802= 1.15

This is a little worrying, the flowie worsened a bit from 1.07 last quarter, receivables increased only 25.5% and inventories increased 58.7%, with sales increasing 66%, this time the culprit is cash that did not increase as fast as sales, I suspect this is due to CSCO investing heavily in its optical business, we'll have to see during the CC.

Overall, the numbers are first class, but that Flowie needs to be watched for the next few quarters. All of the results for CSCO are well above the minimums for RM requirements.

You can access the Q4 2000 conference call through CSCO's IR web site:
http://investor.cisco.com/media_files/nsd/csco/csco_index.htm

Disclaimer: Long CSCO.

-xerohype



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