StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

IBMs Financial Performance - Essay Example

Cite this document
Summary
The paper "IBM’s Financial Performance" shows the financial statement analysis findings of IBM, in relation to the industry average findings of the same accounting period in 2012. In terms of the current ratio, the IBM entity generated an unfavorably lower Current ratio of 0.22 times…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER92.6% of users find it useful
IBMs Financial Performance
Read Text Preview

Extract of sample "IBMs Financial Performance"

The computations indicate the difference between the performance of IBM and the industry’s average outcomes. In terms of the price-earnings ratio, the IBM price-to-earnings ratio is 13.33 times. On the other hand, the industry average generated an unfavorably lower 13 times price-to-earnings ratio (Crosson, 2011).

               Likewise, the above computations show the difference between the performance of IBM and the industry’s average outcomes. In terms of the price-earnings ratio, the IBM price-to-earnings ratio is 13.33 times. On the other hand, the industry average generated an unfavorably lower 13 times the price-to-earnings ratio.

Ratio

IBM

Industry Average

Remarks

Dividend Yield

0.4 %

3 %

IBM is better than Industry

Inventory Turnover

22.21

12 times

IBM is better than Industry

Days sales Inventory

110 days

30 days

The industry is better than IBM

Net Profit Margin

20%

12 %

IBM is better than the industry

Return on Equity

31%

15 %

IBM is better than Industry

 

Dividend Yield

 

 

 

 

 

 

 

 

Dividends given

=

0.85

=

     0.004

 

 

Stock Market Price

 

191.55

   

 

 

 

 

 

 

 

 

 

Inventory Turnover Inventory

 

 

 

 

 

 

 

 

Cost of Goods Sold

=

   54,209.00

 =

     22.21

 

 

ave invite

 

     2,441.00

   

 

 

 

 

 

 

 

 

Net Profit Margin

 

 

 

 

 

 

 

 

Net Income

=

     5,883.00

 =

       0.20

 

 

Net Sales

 

   29,304.00

   

 

 

 

 

 

 

 

 

 

Return on Equity

 

 

 

 

 

 

 

 

Net Income

=

     5,883.00

 =

       0.31

 

 

Total Equity

 

   18,860.00

   

 

 

 

 

 

 

 

 

 

                 The above table shows IBM’s performance, in relation to the performance of the company (Crosson, 2011). IBM’s year-end 0.4 percent dividend yield for 2012. On the other hand, the industry average performed more favorably with its 3 percent dividend yield.  The company’s inventory turnover ratio is 22.21 times. The ratio is more favorable to IBM than the lesser 12 time periods. The above table also shows that the IBM entity generated a favorable day’s sales inventory of 16.21 days. The industry average of 30 days is less favorable compared to the IBM days sales production output. IBM generated a 20 percent net profit margin. The total amount is favorably higher than the 12 percent net profit margin generated by industry competitors. The company’s return on equity figure indicates the company generated a favorable 31 percent return on equity. The ratio is favorably higher than the industry average of 15 percent. The ratio deals with how long management or the owner can recover the amount invested in the business.

 

Ratio

IBM

Industry Average

Remarks

Receivables Turnover

3.3 times

6 times

IBM is better than Industry

Days Sales Outstanding

18 days

60 days

IBM is better than Industry

 

Receivables Turnover

 

 

 

 

 

 

 

 

Net Credit Sales

=

104507

=

3.30954

 

 

Average receivables

 

31577.5

   

 

 

 

 

 

 

 

 

 

Days Sales  Outstanding

 

 

 

 

 

 

 

 

Number days

=

60

=

18

 

 

Receivables turnover

 

3.30954

   

 

 

 

 

 

 

 

 

 

                  The above table indicates IBM’s financial performance in terms of collecting the customer’s receivables (Warren, 2009). The above table shows that IBM’s receivables turnover ratio is 3.3 times. The IBM ratio is less favorable compared to the higher industry average amounting to 6 times. The day's sales outstanding of IBM is 18 days. The IBM figure is better than the industry average’s  60 days of sales outstanding. The ratio shows that it took IBM a shorter time to collect the customer’s receivable accounts when compared to the industry average’s receivables collection efforts

Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“IBM Essay Example | Topics and Well Written Essays - 500 words”, n.d.)
IBM Essay Example | Topics and Well Written Essays - 500 words. Retrieved from https://studentshare.org/finance-accounting/1619473-ibm
(IBM Essay Example | Topics and Well Written Essays - 500 Words)
IBM Essay Example | Topics and Well Written Essays - 500 Words. https://studentshare.org/finance-accounting/1619473-ibm.
“IBM Essay Example | Topics and Well Written Essays - 500 Words”, n.d. https://studentshare.org/finance-accounting/1619473-ibm.
  • Cited: 0 times

CHECK THESE SAMPLES OF IBMs Financial Performance

The return of IBM

It is irrefutable that the functioning of a business organization is highly dependent on its financial performance.... nternational Business Machines or the Big Blue gained its distinction as America's corporate king as its financial performance peaked in the 1980s.... A comparison of their financial performance is also shown.... IBM is the envy of the corporate world as it enjoys an incredible culture of high performance and excellence....
16 Pages (4000 words) Essay

MULTINATIONAL CORP-EVOL & CUR ISSUE

ull line generalists are volume-driven and as their market share grows, so does their financial performance they own 10 to 40% of the market share.... These full-line generalists usually depict very good financial performance as long as they maintain their control of the market (Sheth and Sisodia, 2002).... Their financial performance is inversely proportional to its market share, i.... as their market share grows, their financial performance diminishes....
4 Pages (1000 words) Essay

Information Systems Governance Structure

IBM's (PureSystems) has an integrated expertise which can automate a variety of IT functions while enhancing performance levels.... he information system had a transaction processing software responsible for financial applications, inventory management and other high volume based transaction operations....
2 Pages (500 words) Research Paper

External and Internal Environments of IBM Company

Besides, technology facilitates the delivery of outsourcing services targeted at transforming the clients' existing infrastructural services, which finally enhances consistency and quality delivery of risk management and financial value to exploit new market values.... With respect to the external environment, there is much focus consisting of varieties of activities outside the company....
9 Pages (2250 words) Case Study

The Likelihood of Success for Lenovo Group Ltd on its Acquisition of IBM

The paper 'The Likelihood of Success for Lenovo Group Ltd on its Acquisition of IBM' is an intriguing example of the finance & accounting report.... Lenovo Group Ltd, the largest vendor of smartphones in Mainland China.... The third-largest corporate IT buyout began in January 2005 when Lenovo Group Ltd announced that they will acquire IBM's personal computer business....
11 Pages (2750 words)

Apple Financial Performance in Relation to IBM and Samsung

The paper 'Apple financial performance in Relation to IBM and Samsung' is a thoughtful example of a finance & accounting report.... The focus of this report is on conducting extensive research into Apple Incorporation in relation to its operations and financial performance.... The paper 'Apple financial performance in Relation to IBM and Samsung' is a thoughtful example of a finance & accounting report.... The focus of this report is on conducting extensive research into Apple Incorporation in relation to its operations and financial performance....
9 Pages (2250 words)

Intelligent Building System Vulnerabilities

Trying to reduce this has seen the building owners encounter different challenges as they try to minimize the energy used specifically the financial aspects and keeping in pace with technology (Figueiredo, & da Costa, 2012).... The management system has increased and multiplied in recent years as the building owners try to resolve the challenges they face from managing these buildingsIBMV and Information TechnologyKailas, Cecchi, & Mukherjee, (2012) the increase in the building management systems and the great development and evolution of the internet, with IT infrastructure spread, is a key to the invention and creation of the Intelligent Building Management Systems (ibms)....
12 Pages (3000 words)

Database Management Systems - MySQL and Oracle

The use of either model depends on the requirements of the organization and its financial capability.... The paper "Database Management Systems - MySQL and Oracle" is an outstanding example of an information technology case study.... The use and need for data have in the recent past become a vital part of any organization....
10 Pages (2500 words) Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us