IBM financial report

Jenny Zulay Suárez Solano

Public accounting, Faculty of Business Sciences, Minuto de Dios University Corporation

NRC 10406- financial administration

Blanca Eugenia Tarazona Sanchez

November 3, 2021
 Introduction

In this report we will analyze the identification of IBM's capital structure, short, medium
and long term financing and dividend policy.
To do this, helping us economically, we will know the statement of financial position and
the income statement, and thus be able to carry out the respective analysis of this entity.
Intl Business Machines Corp Com
In Dollar US in thousands

Consolidated 31/12/2015 31/12/2016 31/12/2017 31/12/2018

INC STMT
Period type (months) 12 12 12 12
Source of data reported reported reported reported

+Net operating revenues 81,741,000 79,919,000 79,139,000 79,591,000

-Cost of goods sold 41,057,000 41,625,000 42,913,000 42,655,000
=Gross profit 40,684,000 38,294,000 36,227,000 36,936,000
-SGA Expenses and R&D 24,995,000 25,189,000 24,428,000 23,719,000
-Other oper exp (income) 0 145,000 -216,000 1,152,000
=Profit loss from operating activities 15,689,000 12,960,000 12,015,000 12,065,000
-Net financial exp (inc) 468,000 630,000 615,000 723,000
+Net equity income 0 0 0 0
+Other income (expense) 724,000 0 0 0
=Profit loss before tax 15,945,000 12,330,000 11,400,000 11,342,000
-Income tax expense continuing operations 2,581,000 449,000 5,642,000 2,619,000
-Other 0 0 0 0
=Profit loss from continuing operations 13,364,000 11,881,000 5,758,000 8,723,000
+Profit loss from discontinued operations -174,000 -9,000 -5,000 5,000
+Extraordinary items 0 0 0 0
+Changes account princ 0 0 0 0
=Consolidated net income 13,190,000 11,872,000 5,753,000 8,728,000
-Profit loss attributable to noncontrolling interests 0 0 0 0
=Net income 13,190,000 11,872,000 5,753,000 8,728,000

CASH FLOW
Period type (months) 12 12 12 12
Source of data reported reported reported reported

+Cash flows from used in operating activities 17,008,000 16,958,000 16,724,000 15,247,000
Net income 13,190,000 11,872,000 5,753,000 8,728,000
Adjustments for depreciation and amortisation expense 3,855,000 4,381,000 4,541,000 4,480,000
Decr(incr) assets & liab -2,444,000 1,231,000 6,813,000 554,000
Oth Oper Cash Flow Items 2,407,000 -526,000 -383,000 1,486,000
+Tot Cash from Inv Activ -8,160,000 -10,976,000 -7,096,000 -4,913,000
Prop, plan & equip net -3,781,000 -3,726,000 -3,313,000 -3,716,000
Addition to property, plant and equipment -4,151,000 -4,150,000 -3,773,000 -3,964,000
Proceeds from sales of property plant and equipment classified as investing activities 370,000 424,000 460,000 248,000
Investments net -3,981,000 -6,358,000 -1,755,000 -693,000
Acquisition of investmen -6,422,000 -11,596,000 -5,460,000 -7,180,000
Sale of investments 2,441,000 5,238,000 3,705,000 6,487,000
Other acq(sale) of inves 0 0 0 0
Oth inv cash flow items -398,000 -891,000 -2,028,000 -503,000
+Cash flows from used in financing activities -9,165,000 -5,791,000 -6,418,000 -10,469,000
Proceeds(repaym) of debt 19,000 2,763,000 3,447,000 -301,000
Proceeds from debt - 9,132,000 9,643,000 6,891,000
Repayment of debt - -6,395,000 -6,816,000 -8,533,000
Other proc (rep) of debt - 26,000 620,000 1,341,000
Proc from (repur) equity -4,609,000 -3,298,000 -4,165,000 -4,443,000
Proc from issu of equity 0 204,000 175,000 0
Paym for repur of equity -4,609,000 -3,502,000 -4,340,000 -4,443,000
Dividends paid classified as financing activities -4,897,000 -5,256,000 -5,506,000 -5,666,000
Oth Fin Cash Flow Items 322,000 0 -193,000 -60,000
+Discontinued operations 0 0 0 0
+Effect of exchange rate changes on cash and cash equivalents -473,000 -51,000 937,000 -495,000
+Other changes 0 0 0 0
=Increase decrease in cash and cash equivalents -790,000 140,000 4,146,000 -630,000
ASSETS
Total assets 110,495,000 117,470,000 125,356,000 123,382,000
Current Assets 42,504,000 43,888,000 49,735,000 49,146,000
Cash & ST Investments 8,194,000 8,527,000 12,580,000 11,997,000
Accounts receivable net 8,333,000 9,182,000 8,928,000 7,432,000
Inventories 1,551,000 1,553,000 1,583,000 1,682,000
Other Assets ST 24,426,000 24,627,000 26,644,000 28,034,000
Inv in subs and others 0 4,585,000 4,919,000 2,386,000
Property plant and equipment 10,727,000 10,830,000 11,116,000 10,792,000
Intangibles & goodwill 35,508,000 40,887,000 40,530,000 39,352,000
Other assets 21,756,000 17,279,000 19,055,000 21,706,000

LIABILITIES
Liabilities and equity 110,495,000 117,470,000 125,356,000 123,382,000
Total liabilities 96,071,000 99,077,000 107,631,000 106,453,000
Current Liabilities 34,269,000 36,275,000 37,363,000 38,227,000
Accounts payable current 6,028,000 6,209,000 6,451,000 6,558,000
Debt ST 6,461,000 7,513,000 6,987,000 10,207,000
Other ST Liabilit 21,781,000 22,552,000 23,925,000 21,462,000
Debt LT 33,428,000 34,655,000 39,837,000 35,605,000
Deferred Taxes LT 0 0 0 0
Other Liabilities LT 28,374,000 28,147,000 30,431,000 32,621,000
Stockholder equity (total) 14,424,000 18,392,000 17,725,000 16,929,000
Noncontrolling interests 162,000 146,000 131,000 134,000
Stockholders equity (parent) 14,262,000 18,246,000 17,594,000 16,796,000
Preferred stock 0 0 0 0
Common stock & surplus 53,262,000 53,935,000 54,566,000 55,151,000
Retained earnings 146,124,000 152,759,000 153,126,000 159,206,000
Other equity -185,125,000 -188,448,000 -190,099,000 -197,561,000

NUM SHARES
Total shares outstand 970,110 950,855 925,791 908,794
150.626198081763 160.654434307903 165.400114581754 175.18385802063

MISC
Reestat (inhibit subtrac No No No No
Financial Statement Date 31/12/2015 31/12/2016 31/12/2017 31/12/2018
Filed as of date (this publication) 23/02/2016 28/02/2017 27/02/2018 26/02/2019
Date of last ammendment made by Economatica 23/06/2017 22/06/2017 28/02/2018 28/02/2019
Index used to generate values of 3 and 12 months - - - -
Fin statement format US Indust US Indust US Indust US Indust
Consolidated Yes Yes Yes Yes
Document type 10-K 10-K 10-K 10-K
 Economatica

31/12/2019 31/12/2020 2015 Vs 2016 2016 Vs 2017 2017 Vs 2018

12 12 Value Value Value

reported reported Absolute Relative Absolute Relative Absolute Relative

77,147,000 73,620,000 -1,822,000 -2.23% -780,000 -0.98% 452,000 0.57%

40,659,000 38,046,000 568,000 1.38% 1,288,000 3.09% -258,000 -0.60%
36,488,000 35,575,000 -2,390,000 -5.87% -2,067,000 -5.40% 709,000 1.96%
25,945,000 28,789,000 194,000 0.78% -761,000 -3.02% -709,000 -2.90%
0 0 145,000 -361,000 -248.97% 1,368,000 -633.33%
10,543,000 6,786,000 -2,729,000 -17.39% -945,000 -7.29% 50,000 0.42%
1,344,000 1,288,000 162,000 34.62% -15,000 -2.38% 108,000 17.56%
0 0 0 0 0
968,000 -861,000 -724,000 -100.00% 0 0
10,166,000 4,637,000 -3,615,000 -22.67% -930,000 -7.54% -58,000 -0.51%
731,000 -864,000 -2,132,000 -82.60% 5,193,000 1156.57% -3,023,000 -53.58%
0 0 0 0 0
9,435,000 5,501,000 -1,483,000 -11.10% -6,123,000 -51.54% 2,965,000 51.49%
-4,000 89,000 165,000 -94.83% 4,000 -44.44% 10,000 -200.00%
0 0 0 0 0
0 0 0 0 0
9,431,000 5,590,000 -1,318,000 -9.99% -6,119,000 -51.54% 2,975,000 51.71%
0 0 0 0 0
9,431,000 5,590,000 -1,318,000 -9.99% -6,119,000 -51.54% 2,975,000 51.71%

12 12
reported reported

14,770,000 18,197,000
9,431,000 5,590,000
6,059,000 6,695,000
0 0
-719,000 5,913,000
-26,936,000 -3,028,000
-2,370,000 -3,042,000
-2,907,000 -3,230,000
537,000 188,000
-32,362,000 -461,000
-36,323,000 -6,582,000
3,961,000 6,121,000
0 0
7,796,000 475,000
9,042,000 -9,721,000
16,284,000 -3,714,000
31,825,000 10,504,000
-15,541,000 -13,365,000
0 -853,000
-1,633,000 0
0 0
-1,633,000 0
-5,707,000 -5,797,000
99,000 -210,000
0 0
-167,000 -87,000
0 0
-3,290,000 5,361,000
 152,186,000 155,971,000 6,975,000 6.31% 7,886,000 6.71% -1,974,000 -1.57%
38,420,000 39,165,000 1,384,000 3.26% 5,847,000 13.32% -589,000 -1.18%
8,868,000 13,675,000 333,000 4.06% 4,053,000 47.53% -583,000 -4.63%
7,870,000 7,132,000 849,000 10.19% -254,000 -2.77% -1,496,000 -16.76%
1,619,000 1,839,000 2,000 0.13% 30,000 1.93% 99,000 6.25%
20,063,000 16,519,000 201,000 0.82% 2,017,000 8.19% 1,390,000 5.22%
2,074,000 0 4,585,000 334,000 7.28% -2,533,000 -51.49%
10,010,000 10,040,000 103,000 0.96% 286,000 2.64% -324,000 -2.91%
73,457,000 75,695,000 5,379,000 15.15% -357,000 -0.87% -1,178,000 -2.91%
28,227,000 31,072,000 -4,477,000 -20.58% 1,776,000 10.28% 2,651,000 13.91%

152,186,000 155,971,000 6,975,000 6.31% 7,886,000 6.71% -1,974,000 -1.57%

131,201,000 135,244,000 3,006,000 3.13% 8,554,000 8.63% -1,178,000 -1.09%
37,701,000 39,869,000 2,006,000 5.85% 1,088,000 3.00% 864,000 2.31%
4,896,000 4,908,000 181,000 3.00% 242,000 3.90% 107,000 1.66%
10,177,000 8,540,000 1,052,000 16.28% -526,000 -7.00% 3,220,000 46.09%
22,628,000 26,421,000 771,000 3.54% 1,373,000 6.09% -2,463,000 -10.29%
57,981,000 57,929,000 1,227,000 3.67% 5,182,000 14.95% -4,232,000 -10.62%
0 0 0 0 0
35,519,000 37,446,000 -227,000 -0.80% 2,284,000 8.11% 2,190,000 7.20%
20,985,000 20,726,000 3,968,000 27.51% -667,000 -3.63% -796,000 -4.49%
144,000 129,000 -16,000 -9.88% -15,000 -10.27% 3,000 2.29%
20,841,000 20,597,000 3,984,000 27.93% -652,000 -3.57% -798,000 -4.54%
0 0 0 0 0
55,895,000 56,556,000 673,000 1.26% 631,000 1.17% 585,000 1.07%
162,954,000 162,717,000 6,635,000 4.54% 367,000 0.24% 6,080,000 3.97%
-198,010,000 -198,676,000 -3,323,000 1.80% -1,651,000 0.88% -7,462,000 3.93%

885,637 891,057
183.996283427282 182.611189651282

No No
31/12/2019 31/12/2020
25/02/2020 23/02/2021
27/02/2020 24/02/2021
- -
US Indust US Indust
Yes Yes
10-K 10-K
 2018 Vs 2019 2019 Vs 2020

Value Value
Absolute Relative Absolute Relative

-2,444,000 -3.07% -3,527,000 -4.57%

-1,996,000 -4.68% -2,613,000 -6.43%
-448,000 -1.21% -913,000 -2.50%
2,226,000 9.38% 2,844,000 10.96%
-1,152,000 -100.00% 0
-1,522,000 -12.62% -3,757,000 -35.64%
621,000 85.89% -56,000 -4.17%
0 0
968,000 -1,829,000 -188.95%
-1,176,000 -10.37% -5,529,000 -54.39%
-1,888,000 -72.09% -1,595,000 -218.19%
0 0
712,000 8.16% -3,934,000 -41.70%
-9,000 -180.00% 93,000 -2325.00%
0 0
0 0
703,000 8.05% -3,841,000 -40.73%
0 0
703,000 8.05% -3,841,000 -40.73%
 28,804,000 23.35% 3,785,000 2.49%
-10,726,000 -21.82% 745,000 1.94%
-3,129,000 -26.08% 4,807,000 54.21%
438,000 5.89% -738,000 -9.38%
-63,000 -3.75% 220,000 13.59%
-7,971,000 -28.43% -3,544,000 -17.66%
-312,000 -13.08% -2,074,000 -100.00%
-782,000 -7.25% 30,000 0.30%
34,105,000 86.67% 2,238,000 3.05%
6,521,000 30.04% 2,845,000 10.08%

28,804,000 23.35% 3,785,000 2.49%

24,748,000 23.25% 4,043,000 3.08%
-526,000 -1.38% 2,168,000 5.75%
-1,662,000 -25.34% 12,000 0.25%
-30,000 -0.29% -1,637,000 -16.09%
1,166,000 5.43% 3,793,000 16.76%
22,376,000 62.85% -52,000 -0.09%
0 0
2,898,000 8.88% 1,927,000 5.43%
4,056,000 23.96% -259,000 -1.23%
10,000 7.46% -15,000 -10.42%
4,045,000 24.08% -244,000 -1.17%
0 0
744,000 1.35% 661,000 1.18%
3,748,000 2.35% -237,000 -0.15%
-449,000 0.23% -666,000 0.34%
Intl Business Machines Corp Com
In % of total, In Dollar US

Consolidated 31/12/2015 31/12/2016 31/12/2017 31/12/2018

INC STMT
Period type (months) 12 12 12 12
Source of data reported reported reported reported

+Net operating revenues 100 100 100 100

-Cost of goods sold 50 52 54 54
=Gross profit 50 48 46 46
-SGA Expenses and R&D 31 32 31 30
-Other oper exp (income) 0 0 0 1
=Profit loss from operating activities 19 16 15 15
-Net financial exp (inc) 1 1 1 1
+Net equity income 0 0 0 0
+Other income (expense) 1 0 0 0
=Profit loss before tax 20 15 14 14
-Income tax expense continuing operations 3 1 7 3
-Other 0 0 0 0
=Profit loss from continuing operations 16 15 7 11
+Profit loss from discontinued operations 0 0 0 0
+Extraordinary items 0 0 0 0
+Changes account princ 0 0 0 0
=Consolidated net income 16 15 7 11
-Profit loss attributable to noncontrolling interests 0 0 0 0
=Net income 16 15 7 11

CASH FLOW
Period type (months) 12 12 12 12
Source of data reported reported reported reported

+Cash flows from used in operating activities - - - -

Net income - - - -
Adjustments for depreciation and amortisation expense - - - -
Decr(incr) assets & liab - - - -
Oth Oper Cash Flow Items - - - -
+Tot Cash from Inv Activ - - - -
Prop, plan & equip net - - - -
Addition to property, plant and equipment - - - -
Proceeds from sales of property plant and equipment classified as investing activities - - - -
Investments net - - - -
Acquisition of investmen - - - -
Sale of investments - - - -
Other acq(sale) of inves - - - -
 Oth inv cash flow items - - - -
+Cash flows from used in financing activities - - - -
Proceeds(repaym) of debt - - - -
Proceeds from debt - - - -
Repayment of debt - - - -
Other proc (rep) of debt - - - -
Proc from (repur) equity - - - -
Proc from issu of equity - - - -
Paym for repur of equity - - - -
Dividends paid classified as financing activities - - - -
Oth Fin Cash Flow Items - - - -
+Discontinued operations - - - -
+Effect of exchange rate changes on cash and cash equivalents - - - -
+Other changes - - - -
=Increase decrease in cash and cash equivalents - - - -

ASSETS
Total assets 100 100 100 100
Current Assets 38 37 40 40
Cash & ST Investments 7 7 10 10
Accounts receivable net 8 8 7 6
Inventories 1 1 1 1
Other Assets ST 22 21 21 23
Inv in subs and others 0 4 4 2
Property plant and equipment 10 9 9 9
Intangibles & goodwill 32 35 32 32
Other assets 20 15 15 18

LIABILITIES
Liabilities and equity 100 100 100 100
Total liabilities 87 84 86 86
Current Liabilities 31 31 30 31
Accounts payable current 5 5 5 5
Debt ST 6 6 6 8
Other ST Liabilit 20 19 19 17
Debt LT 30 30 32 29
Deferred Taxes LT 0 0 0 0
Other Liabilities LT 26 24 24 26
Stockholder equity (total) 13 16 14 14
Noncontrolling interests 0 0 0 0
Stockholders equity (parent) 13 16 14 14
Preferred stock 0 0 0 0
Common stock & surplus 48 46 44 45
Retained earnings 132 130 122 129
Other equity -168 -160 -152 -160
NUM SHARES
Total shares outstand - - - -

MISC
Reestat (inhibit subtrac - - - -
Financial Statement Date 31/12/2015 31/12/2016 31/12/2017 31/12/2018
Filed as of date (this publication) 23/02/2016 28/02/2017 27/02/2018 26/02/2019
Date of last ammendment made by Economatica 23/06/2017 22/06/2017 28/02/2018 28/02/2019
Index used to generate values of 3 and 12 months - - - -
Fin statement format US Indust US Indust US Indust US Indust
Consolidated Yes Yes Yes Yes
Document type - - - -
 Economatica

31/12/2019 31/12/2020

12 12
reported reported

100 100
53 52
47 48
34 39
0 0
14 9
2 2
0 0
1 -1
13 6
1 -1
0 0
12 7
0 0
0 0
0 0
12 8
0 0
12 8

12 12
reported reported

- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
 - -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -

100 100
25 25
6 9
5 5
1 1
13 11
1 0
7 6
48 49
19 20

100 100
86 87
25 26
3 3
7 5
15 17
38 37
0 0
23 24
14 13
0 0
14 13
0 0
37 36
107 104
-130 -127
 - -

- -
31/12/2019 31/12/2020
25/02/2020 23/02/2021
27/02/2020 24/02/2021
- -
US Indust US Indust
Yes Yes
- -
 Analysis

Analysis of the capital structure:

The structure of IBM's capital allows us to see that from 2015 to 2020, the company has
been increasing intangibles and Goodwill, it has created more and more value, starting in
2015 with a participation of 32 % reaching 49% of the value of the company in 2020 is
intangible.IBM distributes the financing to fund the resources of the company with a high
financing, its liabilities if we see them from 2015 to 2020 remains above 84%, this shows
that less than 20% belongs to the assets to cover the resources In conclusion, IBM uses the
resources of third parties to finance its operations, thus its capital structure.

Analysis of the type of financing in the short, medium and long term:

The level of leverage is high, it works with the capital of third parties and the highest debt
value is in the long term in 2020. Although in the period of 6 years the liability is almost
permanent, it decreases or increases very slightly, if we see how In 2019 and 2020 there is a
slightly more striking increase in long-term liabilities, with short-term liabilities being less.

Dividend policies necessary for the company:

Since 2015 we can see how the shares have been falling, this shows that they have been
collecting them little by little, in 2015 they had 970,110 and in 2020 we see that it
decreased to 891,087, this may be because they are not being financed via equity through
shares but by contribution of third parties, the shareholders have lost power of control in
the company.Retained earnings show that from 2015 to 2020 they continue to maintain a
minimum of retained earnings, and have even been increasing a bit.
The common capital or common shares shows that dividends are paid to them and that
over the years they have increased slightly from 53 to 56,556,000.
At IBM we see that there are no preferred shares, all of them invest or contribute their
resources in the company, an example of this is the increase in the percentage of profit
retention.
 Conclusion

The capital structure allows us to understand the way in which a company

finances its assets through its own resources or those of third parties. To
determine the capital structure of IBM, an analysis of the profitability-risk of
the financing options is carried out, showing as a result that its Goodwill
weighs on its assets, and that this company funds its resources to a large
extent with third parties managing a high financing, this can be good to the
extent that the company saves the payment of dividends and pays very low
rates for financing, sometimes it is more profitable, which is what we can see
in IBM.