The review of Net Profit Margin witnessed a fluctuating trend. The Net Profit Margin declined from59% in 2020 to 9.60% in 2024.
The average EBIT Margin for the period under analysis was 10.15%, with 2022 and 2023 performing the worst and best
In the current year, IBM was able to cover its interest liabilities 39 times in the current year- compared to 2020 when it was 4.60 times.
The Asset turnover stood at46 times in 2024 from 0.47 in 2020, implying a low performance on Assets of the business in relation to revenue.
Profitability
The revenue of IBM has fluctuated year on year. The revenue decreased by 10% between 2020 and 2021 and a further 2.20% increase was recorded between 2022 and 2023. There also occurred an increase of 1.44% between 2023 and 2024 (the current period).
IBM’s performance in profitability looks fair as the return on capital employed also recorded a fair performance during the period of analysis.
Liquidity
The company’s result in liquidity looks good, as current ratio/acid test increased from 96:1/0.93:1 to 1.04:1/1:1 on the last year. Which implies that the company does have enough assets to settle its current liabilities.
Capital Structure
IBM is both equity and debt financed.
The debt-to-equity (D/E) ratio has been falling year on year. The gearing position of the company appears to be high as it stood at 400.77% in the current year.
