International Business Machines (IBM)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 135,241,000 | 127,243,000 | 132,001,000 | 155,971,000 | 152,186,000 |
| Total stockholders’ equity | US$ in thousands | 22,533,000 | 21,944,000 | 18,901,000 | 20,597,000 | 20,841,000 |
| Financial leverage ratio | 6.00 | 5.80 | 6.98 | 7.57 | 7.30 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $135,241,000K ÷ $22,533,000K
= 6.00
The financial leverage ratio of International Business Machines Corp. has shown fluctuations over the past five years. The ratio decreased from 7.30 in 2019 to 6.00 in 2023, which indicates a reduction in the company's reliance on debt to finance its operations and investments. This reduction may suggest a strengthening of the company's financial position and a decrease in the associated financial risks.
However, it is important to note that the ratio increased to 6.98 in 2021 before decreasing again in 2022 and 2023. This fluctuation could indicate varying levels of debt utilization by the company during these years, possibly due to strategic decisions related to capital structure and financing.
Overall, a financial leverage ratio of 6.00 in 2023 suggests that International Business Machines Corp. is using debt financing to a moderate extent compared to its equity, which can contribute to magnifying returns on equity but also increase financial risks. Monitoring changes in this ratio over time can provide insights into the company's capital structure and financial health.
Peer comparison
Dec 31, 2023