Question

How would you do a ratio analysis for IBM for years 2016 and 2017?

Answer 1

Annual data for 2016- 2017

For the year ended December 31:	2017 (Doller)	2016 (Doller)
Revenue	79,139	79,919
Income from continuing operations	5758	11881
Loss from discontinued operations, net of tax	(5)	(9)
Net income	5753	11872
Operating (non-GAAP) earnings*	12935	13031
Earnings/(loss) per share of common stock:
Assuming dilution:
Continuing operations	6.14	12.39
Discontinued operations	0.00	(0.01)
Total	6.14	12.38
Basic:
Continuing operations	6.17	12.44
Discontinued operations	0.00	(0.01)
Total	6.17	12.43
Diluted operating (non-GAAP)*	13.80	13.59
Cash dividends paid on common stock	5506	5256
Per share of common stock	5.90	5.50
Investment in property, plant and equipment	3229	3567
Return on IBM stockholders’ equity	35.1%	74.0%

At december 31:	2017 (Doller)	2016 (Doller)
Total Assets	125,356	117,470
Net investment in property	11,116	10,830
Working capital	12,373	7613
Total Debt	46,824	42,169
Total Equity	17,725	18,392

Ratio Analysis

1) Current ratio: Current Assets / Current Liability

2017 = 133%

2016 = 121%

2) Quick Ratio = Cash Equivalent+ Current Receivable+Short term investment / Current Liability

2017 = 129%

2016 = 117%

3) Cash Ratio=

2017 = 34%

2016 = 24%

4) Gross Margin ratio =

2017 = 46%

2016 = 48%

5) Operating margin ratio =

2017 = 15%

2016 =16%

6) Pre-tax margin ratio =

2017 = 14%

2016 = 15%

7) Profit margin ratio =

2017 = 7%

2016 = 15%

8) Pre-tax ROE =

2017 = 65%

2016 = 68%

9) After tax ROE =

2017 = 33%

2016 = 66%