International Business Machines (IBM)
Profitability ratios
Return on sales
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 57.28% | 55.96% | 55.64% | 55.45% | 55.04% | 54.64% | 54.24% | 54.00% | 53.78% | 54.01% | 54.48% | 54.90% | 65.28% | 62.11% | 59.00% | 55.94% | 56.11% | 55.48% | 55.01% | 54.64% |
| Operating profit margin | 13.41% | 11.89% | 12.79% | 13.11% | 12.31% | 11.57% | 12.21% | 12.58% | 8.64% | 9.25% | 9.34% | 10.57% | 2.70% | 3.72% | 3.08% | 0.61% | 15.08% | 14.08% | 13.53% | 16.44% |
| Pretax margin | 11.41% | 9.60% | 14.06% | 14.03% | 13.19% | 2.85% | 2.26% | 1.68% | 0.99% | 10.03% | 9.88% | 10.23% | 9.42% | 10.52% | 9.99% | 7.66% | 11.99% | 11.35% | 13.24% | 16.44% |
| Net profit margin | 11.62% | 10.18% | 13.18% | 12.13% | 11.32% | 3.34% | 3.03% | 2.71% | 2.08% | 9.36% | 9.46% | 10.01% | 11.19% | 11.38% | 10.57% | 10.13% | 14.22% | 14.05% | 15.79% | 16.34% |
The profitability ratios of International Business Machines (IBM) demonstrate fluctuations over the period under consideration.
- Gross profit margin, reflecting the company's profitability after accounting for the cost of goods sold, showed an overall increasing trend from December 2019 to September 2021, reaching a peak of 65.28%. However, there was a slight decline by December 2024, standing at 57.28%.
- Operating profit margin, which indicates the company's efficiency in managing its operating expenses in relation to its revenue, experienced significant variability. After a remarkable decline in December 2020 to 0.61%, it gradually recovered and stabilized around 13% in the latter part of the period.
- Pretax margin, depicting IBM's profitability before taxes, fluctuated considerably throughout the period. Notably, there was a sharp decrease in June and September 2022 before recovering and achieving a peak of 14.06% by March 2024.
- Net profit margin, showcasing IBM's net income as a percentage of its revenue, exhibited fluctuations similar to pretax margin. The margin saw a significant dip in June and September 2022 but rebounded by December 2023, reaching 12.13%.
In conclusion, IBM's profitability ratios reflect a mix of challenges and improvements throughout the analyzed period, indicating the company's efforts to adapt to changing market dynamics and optimize its operational performance.
Return on investment
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 6.29% | 5.45% | 5.79% | 6.00% | 5.82% | 5.30% | 5.54% | 5.98% | 4.16% | 4.33% | 4.09% | 4.59% | 0.80% | 1.19% | 1.05% | 0.21% | 5.44% | 5.12% | 5.04% | 6.23% |
| Return on assets (ROA) | 5.45% | 4.67% | 5.96% | 5.55% | 5.35% | 1.53% | 1.37% | 1.29% | 1.00% | 4.38% | 4.14% | 4.35% | 3.30% | 3.63% | 3.61% | 3.58% | 5.13% | 5.11% | 5.88% | 6.20% |
| Return on total capital | 11.70% | 9.80% | 13.46% | 14.16% | 13.33% | 4.28% | 3.50% | 3.27% | 2.78% | 11.28% | 10.60% | 11.00% | 7.49% | 8.68% | 8.70% | 7.38% | 10.47% | 10.26% | 12.41% | 14.46% |
| Return on equity (ROE) | 27.38% | 25.63% | 35.17% | 33.29% | 30.00% | 9.12% | 8.48% | 7.47% | 6.29% | 28.79% | 28.98% | 30.38% | 21.44% | 24.31% | 25.11% | 27.14% | 37.27% | 38.33% | 45.08% | 45.25% |
Profitability Ratios Analysis for International Business Machines (IBM)
1. Operating Return on Assets (Operating ROA):
- The Operating ROA for IBM has shown fluctuations over the analyzed period, ranging from a low of 0.21% in December 2020 to a peak of 6.29% in December 2024.
- Overall, the Operating ROA has generally remained above 4% in recent quarters, indicating that IBM has been effectively generating operating profit from its assets.
2. Return on Assets (ROA):
- The ROA also exhibits variability, dipping as low as 1.00% in September 2022 and peaking at 5.96% in March 2024.
- This measure considers all forms of earnings before interest and taxes, reflecting IBM's ability to generate profits from its total assets.
3. Return on Total Capital:
- IBM's Return on Total Capital fluctuated notably, from a low of 2.78% in September 2022 to a high of 14.46% in December 2019.
- This ratio evaluates the company's ability to generate returns for both debt and equity holders, indicating the efficiency of capital allocation.
4. Return on Equity (ROE):
- IBM's ROE has also displayed fluctuations, with a range from a low of 6.29% in September 2022 to a high of 45.25% in December 2019.
- ROE reflects the company's ability to generate profits from shareholders' equity, showcasing how effectively IBM is utilizing shareholder funds to generate returns.
In conclusion, while these profitability ratios have shown variability over time, IBM has generally demonstrated the ability to generate profitable returns from its assets and capital. It's crucial for investors and stakeholders to monitor these ratios to assess the company's operational efficiency and financial performance consistently.
See also:
International Business Machines Profitability Ratios (Quarterly Data)