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Financial Analysis of International Business Machines
Financial Analysis of International Business Machines
The Financial Analysis of International Business Machines Corporation should answer the following question: is
{Is International Business Machines Corporation} worthy of my $100,000 stock investment?
- Make sure you answer this question with arguments, data, facts, qualitative and quantitative supporting your position and overall analysis.
2. Example using IBM I found a 2018 IBM Annual Report on my desk – 2019 is not out yet but soon will be.
- IBM is a stable company and a solid investment. From the years ending 2016 to 2018 total IBM’s net revenue was a consistent $79 billion with cost of goods in each of those three years at $42 billion. Although Net Income varied from $12 billion in 2016 to $6 billion in 2017 to $9 billion in 2018, the only difference in any expense listed on the income statement for those three years was the provision for income taxes. Those provisions are estimates and are subject to change. Since the departure from IBM’s old business model of selling main frame computers it has made a steady transition into a business solutions business. Income from service solution is in the $50 billion range and sales income in the $26 billion. There no peaks or valleys within IBM profitable performance for years 2016 to 2018. The ease in the transition was aided by the fact that the three letters in IBM carry a cache brand people trust.
Another measure of stability of IBM is with its positive net cash from operating activities which was between $17 billion and $15 billion during the years 2016 through 2018. IBM manages to convert $6 billion each year to the purchase of marketable securities. There is very little change in total assets the last two years revealed total assets were $123 billion and $126 billion. And IBM payments toward bond cash are in the $8 billion range each year and borrowings were in the $9 billion range.
- In one short paragraph or two burst I went from Income Statement to Cash Flow to Balance Sheet – keep a path – tell a story and avoid short burst of data points without using the data for what it reveals.
Financial Analysis of International Business Machines
