Description
- An annual report is a comprehensive statement describing a company's activities throughout the preceding year. Annual reports are intended to give shareholders and other interested stakeholders information about the company's activities and financial performance. All public corporations must provide shareholders with a financial report every year so that shareholders understand and are able to assess overall performance.
The front part of the report often contains an impressive combination of graphics, photos and an accompanying narrative, all of which chronicle the company's activities over the past year. The back part of the report contains detailed financial and operational information.
In this assignment, you will read and assess the financial performance of IBM, Inc. over the past couple of years. Begin by downloading the 2013 IBM annual report from the IBM Website.
Read Pages 1 – 28 and then find the financial data (i.e., income statements, balance sheets and statements of cash flows) on pages 78 – 81.
Using the IBM income statement data on Page 78 in the annual report, create a common size income statement by filling in the following format:
| 2013 | 2012 | 2011 |
Revenue (services) | |||
Cost (services) | |||
Gross profit (services) | |||
Revenue (sales) | |||
Cost (sales) | |||
Gross profit (sales) | |||
Revenue (financing) | |||
Cost (financing) | |||
Gross profit (financing) | |||
Total revenue | |||
Total cost | |||
Gross profit (total) | |||
Less expenses | |||
Selling, general and administrative | |||
Research, development, engineering | |||
Intellectual property and custom development income | |||
Other (income) and expense | |||
Interest expense | |||
Total expenses and other (income) | |||
Income before taxes | |||
Provision for income taxes | |||
Net income |
Then, using the income statement data and the balance sheet data on page 80 in the IBM annual report, create a table of ratios
To create the required common size income statements for IBM, see the following resources:
NetMBA (2010) Common Size Financial Statements Investigating AnswersUse total revenue for sales to construct these values.
Write a four-part analysis of IBM. In Section 1 your paper, summarize what you learned and/or found particularly interesting about IBM in your reading of the first 28 pages of the annual report. In Section 2, insert the tables you created (either cut and paste from Excel or create tables in Word) . In Section 3, evaluate IBM by discussing the numbers in your common size income statement and balance sheet ratios. Look for trends that identify areas of strength, stability or possible concern. Finally, in Section 4, find two scholarly reports that discuss IBM’s financial performance during this period and discuss how those professional reports correlate with what you found in your analysis.
Length: 4-5 pages not including title page and references
Your response should demonstrate thoughtful consideration of the ideas and concepts presented in the course and provide new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards.
Please use these following links for help:
https://www.khanacademy.org/economics-finance-doma...
www.films.com (Financial reporting for business).
Explanation & Answer
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Running head: IBM, INC.
Topic: IBM, Inc.
Student name:
Instructor name:
Course name:
Date:
IBM, Inc.
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IBM, Inc. surpassed most of its competitors when it comes to flexibility, security, and
pricing of its commodities. The clientele base of the institution grows each financial year and as
of the report, the company serves well over thirty thousand customers such Sun Life Stadium,
Honda, US Open Tennis among other hundreds of companies engaging in business and games.
According to Blackstaff, (2013), IBM, Inc. intends to increase the activities that would
increase the company’s innovation potential. Examples of areas that they could improve include
finance, marketing, procurement and human resource department. The firm offers its customers
an array of at least one hundred Software-as-a-Services (SaaS). The SaaS software by the IBM
offers support to its customers 24 out of 25 in the list of Fortune 500. The company delivers
consumers services beyond their expectations, and they intend to deliver as many services. Like
other businesses, the firm is among other companies aspiring to implement compassable business
services meeting the increased demand for speed, compliance with all legal requirements and
data residency. IBM, Inc. is fast investing in the Cloud business, with a total of 25 data centers
globally and the firm is almost completing its $ 1.2 billion investment regarding setting up of
other data centers in Germany, France, China, Canada, Brazil, Australia, UK, and the USA.
According to Blackstaff, (2013), the investment in the cloud system got indicated in the
outcomes of the financial and income statement. In 2013, the IBM, Inc.’s cloud business grew by
69% indicating that the company obtained most of its revenue indicated in the $ 4.4 billion
revenue. IBM, Inc. uses the cloud to deliver business to its customers, and the service continues
to offer financial benefits to its customers. Satisfied customers translate into increased revenue
and enterprise productivity.
IBM, Inc.
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IBM COMPANY
Years
Annual Income Statement (Values in
Millions)
2013
2012
2011
2010
2009
Sales
37,508.2
0
26,907.3
0
10,600.9
0
8,055.10
32,505.4
0
23,360.1
0
9,145.30
28,681.10
24,623.00
20,768.80
17,779.70
7,912.30
6,843.30
Selling, General & Admin. Expense
42,201.6
0
30,383.7
0
11,817.9
0
9,363.80
6,950.90
5,980.80
5,175.80
Depreciation & Amortization
482.1
403.1
346.1
307.3
269.2
EBIT
1,972.00
2,142.70
1,848.30
1,624.20
1,398.30
Other Income, Net
31.6
33.6
40.4
13.1
27.5
Total Income Avail for Interest Exp.
2,003.60
2,176.30
1,888.70
1,637.30
1,425.80
Interest Expense
0
0
0
0
3.1
Minority Interest
0
0
0
0
0
Pre-tax Income
2,003.60
2,176.30
1,888.70
1,637.30
1,422.70
Income Taxes
896.1
816.1
713
618.1
537.1
Special Income/Charges
0
0
0
0
0
Net Income from Cont. Operations
1,107.50
1,360.20
1,175.70
1,019.20
885.6
Net Income from Discont. Opers.
452
0
0
0
0
Net Income from Total Operations
1,559.50
1,360.20
1,175.70
1,019.20
885.6
Extraordinary Income
0
0
0
0
0
Income from Cum. Eff. of Acct. Chg.
0
0
0
0
0
Income from Tax Loss Carryforward
0
0
0
0
0
Other Gains (Losses)
0
0
0
0
0
Total Net I...