International Business Machines (IBM)

Activity ratios

Short-term

Turnover ratios

	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	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover	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	23.98	23.68	23.70
Receivables turnover	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	3.68	3.15	2.82
Payables turnover	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	10.16	8.75	7.35
Working capital turnover	—	—	31.12	12.14	—	—	—	—	—	—	—	—	—	30.02	37.11	—	80.27	25.25	2.21	5.69

The activity ratios of International Business Machines Corp. provide insight into the efficiency of the company in managing its inventory, receivables, payables, and working capital.

1. Inventory turnover: The inventory turnover ratio indicates how efficiently a company is managing its inventory. IBM's inventory turnover has shown a positive trend over the past eight quarters, increasing from 17.94 in Q4 2022 to 23.74 in Q4 2023. This suggests that IBM has been able to sell its inventory more frequently in the most recent quarter, indicating improved efficiency in managing its inventory levels.

2. Receivables turnover: The receivables turnover ratio measures how well a company collects its outstanding receivables. IBM's receivables turnover ratio has fluctuated over the past eight quarters but generally remained above 7. The increase in Q3 2023 to 9.91 indicates that IBM was able to collect its receivables at a faster rate in that quarter compared to previous periods.

3. Payables turnover: The payables turnover ratio illustrates how quickly a company pays its suppliers. IBM's payables turnover ratio has also shown fluctuations but has generally been above 6 over the past eight quarters. The decrease in Q3 2023 to 8.23 may suggest that IBM took longer to settle its payables in that quarter.

4. Working capital turnover: The working capital turnover ratio demonstrates how efficiently a company utilizes its working capital to generate sales. While data is missing for some quarters, the significant spike in Q2 2023 to 31.13 indicates a strong correlation between working capital and sales revenue during that period.

Overall, these activity ratios highlight IBM's ability to efficiently manage its inventory, receivables, payables, and working capital, providing valuable insights into the company's operational performance and financial health.

Average number of days

		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	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	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	15.22	15.42	15.40
Days of sales outstanding (DSO)	days	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	99.18	115.97	129.60
Number of days of payables	days	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	35.94	41.73	49.67

The days of inventory on hand (DOH) for International Business Machines Corp. decreased steadily throughout the year from 21.11 days in Q1 2023 to 15.38 days in Q4 2023, indicating that the company has been managing its inventory more efficiently and holding less excess inventory.

The days of sales outstanding (DSO) also showed a decreasing trend over the year, from 39.58 days in Q1 2023 to 46.34 days in Q4 2023. This suggests that the company has been collecting its accounts receivable more quickly, improving its cash flow by converting sales into cash at a faster rate.

In terms of the number of days of payables, International Business Machines Corp. managed to extend its payment period to suppliers throughout the year, from 49.08 days in Q1 2023 to 54.72 days in Q4 2023. This could indicate a potential improvement in the company's working capital management, allowing it to hold onto cash longer before paying off its obligations.

Overall, the activity ratios suggest that International Business Machines Corp. has been effectively managing its operational activities to improve efficiency, cash flow, and working capital management over the course of the year.

Long-term

	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	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Fixed asset turnover	—	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	7.66	7.63	7.37
Total asset turnover	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	0.52	0.50	0.60

International Business Machines Corp. has shown consistently high levels of efficiency in managing its fixed assets, as evidenced by the fixed asset turnover ratio averaging around 11 in recent quarters. This indicates that the company generates $11.25 to $11.39 in revenue for every dollar invested in fixed assets. The increasing trend in fixed asset turnover reflects the company's ability to effectively utilize its fixed assets to drive revenue.

In terms of total asset turnover, the company's performance has been relatively stable, with ratios ranging from 0.45 to 0.48 in the past quarters. This suggests that for every dollar of total assets, the company generates approximately $0.45 to $0.48 in revenue. While the total asset turnover ratio is lower than the fixed asset turnover ratio, it still demonstrates that IBM efficiently generates revenue relative to its total asset base.

Overall, the high fixed asset turnover ratio indicates effective management of fixed assets, while the stable total asset turnover ratio suggests consistent revenue generation relative to total assets. These ratios reflect IBM's ability to optimize asset utilization and drive overall operational efficiency.