International Business Machines (IBM)

Solvency 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
Debt-to-assets ratio 0.37 0.38 0.38 0.40 0.36 0.36 0.35 0.35 0.34 0.33 0.33 0.34 0.35 0.36 0.36 0.34 0.36 0.39 0.38 0.30
Debt-to-capital ratio 0.69 0.68 0.70 0.71 0.68 0.69 0.70 0.71 0.70 0.68 0.69 0.71 0.72 0.72 0.73 0.72 0.72 0.76 0.77 0.71
Debt-to-equity ratio 2.22 2.12 2.28 2.49 2.10 2.24 2.28 2.44 2.38 2.11 2.22 2.39 2.63 2.60 2.70 2.63 2.60 3.22 3.31 2.41
Financial leverage ratio 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 8.33 8.76 7.94

Based on the solvency ratios of International Business Machines Corp. (IBM) as shown in the table, we can observe the following trends:

1. Debt-to-assets ratio: This ratio has been relatively stable over the quarters, ranging from 0.40 to 0.44. A lower debt-to-assets ratio indicates that a company has less financial risk and a stronger ability to cover its debt obligations with its assets.

2. Debt-to-capital ratio: IBM's debt-to-capital ratio fluctuated between 0.70 and 0.74 over the quarters. This ratio measures the extent to which a company is financed through debt, indicating that IBM relies on debt for approximately 70% to 74% of its capital structure during the period.

3. Debt-to-equity ratio: IBM's debt-to-equity ratio experienced more significant variability, ranging from 2.32 to 2.85. A higher debt-to-equity ratio suggests that the company is relying more on debt financing compared to equity financing, which can increase financial risk.

4. Financial leverage ratio: The financial leverage ratio for IBM varied between 5.60 and 7.00 over the quarters. This ratio reflects the proportion of a company's total assets that are financed by creditors rather than shareholders. A higher financial leverage ratio indicates higher financial risk and greater reliance on debt financing.

In summary, IBM's solvency ratios show a mix of stability and fluctuation in terms of its leverage and debt levels over the quarters, with some quarters showing higher reliance on debt financing compared to others. Investors and stakeholders should monitor these ratios to assess IBM's ability to meet its debt obligations and manage its financial risk effectively.

Coverage 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
Interest coverage 6.40 6.33 2.23 2.08 1.83 1.50 5.99 5.86 6.08 4.43 5.11 5.08 4.28 6.03 5.43 6.18 8.06 9.96 13.82 16.76

The interest coverage ratio for International Business Machines Corp. has shown a consistent upward trend over the past eight quarters. The ratio has increased from 5.23 in Q3 2022 to 10.01 in Q4 2023, indicating the company's ability to comfortably meet its interest obligations with its earnings.

This improvement suggests that IBM's earnings before interest and taxes (EBIT) are more than sufficient to cover its interest expenses, providing a positive sign of financial health and stability. The steady increase in the interest coverage ratio reflects IBM's strong financial performance and its ability to generate enough operating income to service its debt obligations effectively.

Overall, the upward trend in the interest coverage ratio for International Business Machines Corp. showcases the company's ability to manage its debt and indicates a favorable position in terms of its ability to cover interest expenses from operating profits.

See also:

International Business Machines Solvency Ratios (Quarterly Data)