Profitability and Risk Analysis of International Business Machines - IBM
IBM refers to the International Business Machines that is an American business corporation having headquartered in the New York. The company is currently operating in more than 170 states around the globe. The company started its operations in the 1911 as Computing Tabulating Recording Corporation and then in the 1924 the company changed its name to IBM. It is operating in the sales and manufacturing of the computer hardware, software, middleware etc and it also dealing in the services such as hosting, consultation services etc. It is also well known in the world as a reputable research organization. The company has the patents of the ATM and has record of making inventions such as ATM, PC, floppy disk, hard disk drive, relational database, SQL programming, magnetic stripe card, UCP board, dynamic random access memory etc. In this report we have use the ratio analysis for making the examination of the profit position and risk assessment with special reference to the IBM (IBM, 2017).Ratio analysis is a crucial and vital tool used for the analytical purpose. There are different types of the profit and risk assessment ratios are used for the purpose of the analysis. The major goal of this report is to inspect the profit and risk assessment, from year 2011 to 2015, so that to analyze the financial position of the company along with the trend analysis. The major ratios used for the purpose of analysis include the efficiency ratios, solvency ratios, profit ratios etc. The methodology used in the current analysis is to take all the information from the annual reports of the IBM for the last five years and then to make the graphs or charts for each type of the ratio for the trend identification and for the analysis of the current financial position of the IBM. The profitability ratios as return on equity, net profit margin, return on assets etc are used for gaining the analytical view of the company’s past and current position. (continued...) wordcount of report: 1500 words
Introduction:
Profitability Evaluation:
Return on equity:
Net operating profit margin
Return on assets
Return on business assets:
Financial leverage gain
Return on equity after excluding all expenses
Growth ratios
Net profit margin ratio
Common sized income statement
Standardized Statements
Risk Factors Evaluation:
Solvency:
Liquidity:
Efficiency:
The Altman Z-Score and probability of bankruptcy:
References:
Profitability Evaluation:
Return on equity:
Net operating profit margin
Return on assets
Return on business assets:
Financial leverage gain
Return on equity after excluding all expenses
Growth ratios
Net profit margin ratio
Common sized income statement
Standardized Statements
Risk Factors Evaluation:
Solvency:
Liquidity:
Efficiency:
The Altman Z-Score and probability of bankruptcy:
References:
