International Business Machines (IBM)
Financial leverage ratio
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 137,175,000 | 134,339,000 | 137,169,000 | 135,241,000 | 129,321,000 | 132,213,000 | 133,637,000 | 127,243,000 | 125,850,000 | 127,503,000 | 133,275,000 | 132,001,000 | 144,214,000 | 146,814,000 | 148,629,000 | 155,971,000 | 154,128,000 | 154,200,000 | 153,403,000 | 152,186,000 |
| Total stockholders’ equity | US$ in thousands | 27,307,000 | 24,448,000 | 23,261,000 | 22,533,000 | 23,081,000 | 22,201,000 | 21,604,000 | 21,944,000 | 20,076,000 | 19,409,000 | 19,050,000 | 18,901,000 | 22,228,000 | 21,942,000 | 21,389,000 | 20,597,000 | 21,208,000 | 20,551,000 | 19,999,000 | 20,841,000 |
| Financial leverage ratio | 5.02 | 5.49 | 5.90 | 6.00 | 5.60 | 5.96 | 6.19 | 5.80 | 6.27 | 6.57 | 7.00 | 6.98 | 6.49 | 6.69 | 6.95 | 7.57 | 7.27 | 7.50 | 7.67 | 7.30 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $137,175,000K ÷ $27,307,000K
= 5.02
The financial leverage ratio of International Business Machines has shown a declining trend over the analyzed period, indicating a reduction in the company's reliance on debt to finance its operations. The ratio decreased from 7.30 as of December 31, 2019, to 5.02 as of December 31, 2024.
This downward trend in the financial leverage ratio suggests that IBM has been gradually reducing its debt levels relative to its equity, which can be viewed positively by investors and creditors, as lower leverage typically implies lower financial risk.
However, it is essential to note that a very low leverage ratio might also indicate underutilization of debt for potentially advantageous investments. Therefore, while a decreasing financial leverage ratio can signal improved financial stability, the company must strike a balance between leveraging and risk.
Peer comparison
Dec 31, 2024
See also:
International Business Machines Financial Leverage (Quarterly Data)