International Business Machines (IBM)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 7,517,000 | 10,285,000 | 2,229,000 | 7,022,000 | 5,518,000 |
| Long-term debt | US$ in thousands | 49,884,000 | 50,121,000 | 46,189,000 | 44,917,000 | 54,217,000 |
| Total stockholders’ equity | US$ in thousands | 27,307,000 | 22,533,000 | 21,944,000 | 18,901,000 | 20,597,000 |
| Return on total capital | 9.74% | 14.16% | 3.27% | 11.00% | 7.38% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $7,517,000K ÷ ($49,884,000K + $27,307,000K)
= 9.74%
Analyzing International Business Machines' return on total capital over the past five years shows a fluctuating trend. In 2020, the return on total capital was 7.38%, which increased to 11.00% by the end of 2021. However, there was a significant drop in 2022 with a return of 3.27%. The return improved in 2023 to 14.16%, indicating a strong performance. By the end of 2024, the return slightly decreased to 9.74%.
Overall, the return on total capital for International Business Machines has shown variability, with a notable increase in 2023 compared to the previous years. This trend suggests that the company's efficiency in generating profits relative to its total capital has been somewhat inconsistent over the period under review. Additional analysis and context would be necessary to fully understand the factors driving these fluctuations and the implications for the company's financial performance and strategic direction.
Peer comparison
Dec 31, 2024