Excerpts from the fiscal 2015 financial report of Cisco Systems, a leading Internet net worker, are provided below (dollars in millions).
Review the information, calculate relevant ratios from Figure 5€“5, and explain why Cisco appears to be a good or poor investment. The tax rate was 19.8 percent.

Figure 5-5

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2015 2014 2013 Balance Sheet $76,283 $67,114 $65,521 Current assets Long-term assets 37,198 37,956 35,670 Current liabilities 23,623 21,996 19,809 Long-term debt 28,600 20,067 30,151 Shareholders' equity 59,707 56,661 59,128 Income Statement $49,161 $47,142 $48,607 Sales Net income 8,981 7,853 9,983 Interest expense 583 566 564 Return on equity Cost of equity Value creation 0.247 | 0.178 Approximately 7% 2014 2013 Common equity leverage Return on assets Capital structure leverage 0.094 0.079 2014 A 2013 0.892 | 0.884 2014 2013 2.96 2.54 2014 2013 Profit margin x Asset turnover 0.054 0.048 2014 A 2013 1.74 1.63 2014 A 2013 Long-term asset turnover Long-term debt / Assets Current ratio 1.08 1.16 133 145 0.393 | 0.367 Quick ratio Rec. turnover 0.063 | 0.065 2014 2013 NA NA Inv. turnover (days) Days of payables 89.8 92.6 50.4 50.5 2014 2013 Interest coverage 9.29 8.72 2014 2013 Sales & expense management Working capital and long-term asset management Capital structure management