International Business Machines (IBM)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Sep 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019
Inventory turnover	21.33	19.83	22.72	23.74	19.66	18.29	17.30	17.94	15.60	16.30	14.96	15.69	7.82	9.83	11.39	13.42	12.52	13.36	14.38	16.17
Receivables turnover	8.42	9.92	9.30	8.01	10.13	9.50	4.80	4.26	9.63	9.01	4.25	3.83	2.90	2.96	3.16	2.94	3.11	2.88	2.76	2.43
Payables turnover	6.82	8.28	7.67	6.67	8.23	7.36	7.44	6.87	7.35	7.40	7.69	6.54	3.48	4.22	5.03	6.03	6.12	5.29	6.16	5.35
Working capital turnover	48.03	36.43	14.55	—	—	31.12	12.14	—	—	—	—	—	—	—	—	—	30.02	37.11	—	80.27

Inventory Turnover Ratio:

- The inventory turnover ratio for International Business Machines has shown a fluctuating trend over the past few years, ranging from 7.82 to 23.74.
- A higher inventory turnover ratio indicates that IBM is efficiently managing its inventory levels and turning over inventory more frequently.
- The ratio saw a significant increase from September 2021 to December 2023, reaching its peak at 23.74, suggesting effective inventory management during this period.

Receivables Turnover Ratio:

- The receivables turnover ratio for IBM has varied between 2.43 and 10.13 during the observed periods.
- An increasing trend in the receivables turnover ratio indicates that IBM is collecting its receivables more quickly.
- The ratio showed a remarkable jump from June 2022 to September 2023, reaching its highest point at 10.13, reflecting efficient management of accounts receivable during this period.

Payables Turnover Ratio:

- The payables turnover ratio for IBM has displayed fluctuations between 3.48 and 8.28 over the given time frame.
- A higher payables turnover ratio signifies that IBM is paying off its suppliers more swiftly.
- The ratio increased notably from December 2021 to September 2024, peaking at 8.28, indicating improved payment terms with suppliers during this period.

Working Capital Turnover Ratio:

- The working capital turnover ratio for IBM has been intermittent and sporadic, with some periods showing no data.
- A higher working capital turnover ratio indicates better utilization of working capital to generate sales.
- Notably, the ratio saw a significant increase from March 2023 to December 2024, reaching a peak of 48.03, suggesting improved efficiency in utilizing working capital for generating revenue.

Overall, the activity ratios analysis reflects IBM's efforts towards efficient management of inventory, receivables, payables, and working capital, which are crucial for the company's operational performance and financial health.

Average number of days

		Dec 31, 2024	Sep 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	17.11	18.40	16.07	15.38	18.57	19.96	21.10	20.35	23.40	22.39	24.40	23.27	46.69	37.12	32.04	27.20	29.15	27.33	25.37	22.57
Days of sales outstanding (DSO)	days	43.34	36.78	39.26	45.58	36.04	38.40	76.07	85.68	37.92	40.53	85.84	95.32	125.74	123.17	115.45	123.95	117.32	126.60	132.11	150.48
Number of days of payables	days	53.53	44.08	47.56	54.72	44.35	49.62	49.08	53.11	49.65	49.30	47.44	55.81	104.89	86.57	72.56	60.54	59.61	69.00	59.27	68.26

The analysis of International Business Machines' activity ratios reveals the following trends:

1. Days of Inventory on Hand (DOH):
- The company's DOH has shown fluctuations over the years, ranging from a low of 15.38 days on December 31, 2023, to a high of 46.69 days on September 30, 2021.
- Overall, there seems to be some volatility in inventory management, with the DOH decreasing towards the end of the period, indicating potential improvements in inventory turnover efficiency.

2. Days of Sales Outstanding (DSO):
- The DSO has also demonstrated variability, with a peak of 150.48 days on December 31, 2019, and a low of 36.04 days on September 30, 2023.
- The trend suggests a general improvement in the collection of accounts receivable, as the DSO decreased substantially over the years, indicating a more efficient credit management process.

3. Number of Days of Payables:
- The number of days of payables has shown a mix of upward and downward movements, ranging from 36.04 days on September 30, 2023, to 104.89 days on September 30, 2021.
- The variability in payables days may imply changes in the company's payment terms with suppliers. However, it is important to note that a longer payment period can sometimes indicate potential liquidity issues.

In summary, International Business Machines has experienced fluctuations in its activity ratios over the years, with some improvements in inventory turnover and accounts receivable collection efficiency. It is essential for the company to continue monitoring and managing its working capital effectively to support its operational and financial performance.

Long-term

	Dec 31, 2024	Sep 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019
Fixed asset turnover	—	10.97	11.10	—	11.39	11.12	11.34	11.35	11.75	11.31	10.50	10.07	4.66	4.98	5.37	8.89	5.58	5.77	5.93	5.77
Total asset turnover	0.47	0.46	0.45	0.46	0.47	0.46	0.45	0.48	0.48	0.47	0.44	0.43	0.30	0.32	0.34	0.35	0.36	0.36	0.37	0.38

To analyze International Business Machines' long-term activity ratios, we will focus on two key ratios: Fixed Asset Turnover and Total Asset Turnover.

1. Fixed Asset Turnover:
- The Fixed Asset Turnover ratio measures how efficiently a company generates sales revenue from its fixed assets. It indicates how well a company is utilizing its fixed assets to generate sales.
- IBM's Fixed Asset Turnover ratio has shown fluctuations over the years. It increased from 5.77 in December 2019 to 11.39 in September 2023. This shows an improvement in the company's ability to generate sales from its fixed assets over this period.
- However, there are some gaps in the data, with missing values reported for December 2023 suggesting a need for more complete financial reporting.
- Overall, the increasing trend in the Fixed Asset Turnover ratio indicates that IBM has been effectively utilizing its fixed assets to drive sales, indicating operational efficiency and potentially sound investment in fixed assets.

2. Total Asset Turnover:
- The Total Asset Turnover ratio measures a company's ability to generate sales from its total assets. It shows how efficiently a company is using all of its assets to generate revenue.
- IBM's Total Asset Turnover ratio has fluctuated as well, ranging from 0.30 in September 2021 to 0.48 in December 2022 and again in September 2022 and December 2022.
- The ratio showed an overall increasing trend from 2019 to 2024, indicating that IBM has improved its efficiency in generating sales from its total assets over time.
- A consistent improvement in the Total Asset Turnover ratio demonstrates IBM's ability to efficiently utilize its assets to drive revenue growth, which is a positive indicator for the company's operational efficiency and potential profitability.

In conclusion, the analysis of IBM's long-term activity ratios, specifically the Fixed Asset Turnover and Total Asset Turnover ratios, suggests that the company has been improving its asset utilization efficiency over the years. This indicates that IBM has been successful in generating sales revenue from both fixed and total assets, reflecting positively on its operational performance and financial health.