International Business Machines (WBO:IBM) Beneish M-Score : -2.63 (As of Dec. 12, 2024)

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What is International Business Machines Beneish M-Score?

The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.63 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for International Business Machines's Beneish M-Score or its related term are showing as below:

WBO:IBM' s Beneish M-Score Range Over the Past 10 Years
Min: -3.15 Med: -2.76 Max: -2.39
Current: -2.63

During the past 13 years, the highest Beneish M-Score of International Business Machines was -2.39. The lowest was -3.15. And the median was -2.76.

International Business Machines Beneish M-Score Historical Data

The historical data trend for International Business Machines's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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International Business Machines Beneish M-Score Chart

International Business Machines Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.90

-3.15

-2.76

-2.59

-2.75

International Business Machines Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
Beneish M-Score	Get a 7-Day Free Trial															-2.82	-2.75	-2.73	-2.67	-2.63

Competitive Comparison of International Business Machines's Beneish M-Score

For the Information Technology Services subindustry, International Business Machines's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

International Business Machines's Beneish M-Score Distribution in the Software Industry

For the Software industry and Technology sector, International Business Machines's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where International Business Machines's Beneish M-Score falls into.

International Business Machines Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of International Business Machines for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 1.0333

0.528 * 0.9736

0.404 * 0.9801

0.892 * 1.0036

0.115 * 0.9771

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.0538

4.679 * -0.042006

0.327 * 0.9941

-2.67

This Year (Sep24) TTM:

Last Year (Sep23) TTM:

Total Receivables was €10,887 Mil.
Revenue was 13485.267 + 14650.33 + 13305.04 + 15937.46 = €57,378 Mil.
Gross Profit was 7586.42 + 8314.55 + 7122.64 + 9414.839 = €32,438 Mil.
Total Current Assets was €27,519 Mil.
Total Assets was €121,039 Mil.
Property, Plant and Equipment(Net PPE) was €8,081 Mil.
Depreciation, Depletion and Amortization(DDA) was €4,313 Mil.
Selling, General, & Admin. Expense(SGA) was €17,739 Mil.
Total Current Liabilities was €25,997 Mil.
Long-Term Debt & Capital Lease Obligation was €50,219 Mil.
Net Income was -297.33 + 1703.786 + 1476.6 + 3015.096 = €5,898 Mil.
Non Operating Income was -2021.844 + 216.457 + 291.64 + 54.103 = €-1,460 Mil.
Cash Flow from Operations was 2595.781 + 1919.314 + 3834.56 + 4092.571 = €12,442 Mil.

Total Receivables was €10,498 Mil.
Revenue was 13822.624 + 14283.425 + 13311.368 + 15756.304 = €57,174 Mil.
Gross Profit was 7517.551 + 7846.423 + 7013.406 + 9092.608 = €31,470 Mil.
Total Current Assets was €25,960 Mil.
Total Assets was €121,174 Mil.
Property, Plant and Equipment(Net PPE) was €7,947 Mil.
Depreciation, Depletion and Amortization(DDA) was €4,095 Mil.
Selling, General, & Admin. Expense(SGA) was €16,773 Mil.
Total Current Liabilities was €28,678 Mil.
Long-Term Debt & Capital Lease Obligation was €48,072 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total Receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI	=	(Receivables_t / Revenue_t)	/	(Receivables_t-1 / Revenue_t-1)
	=	(10886.783 / 57378.097)	/	(10498.148 / 57173.721)
	=	0.189738	/	0.183618
	=	1.0333

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI	=	GrossMargin_t-1	/	GrossMargin_t
	=	(GrossProfit_t-1 / Revenue_t-1)	/	(GrossProfit_t / Revenue_t)
	=	(31469.988 / 57173.721)	/	(32438.449 / 57378.097)
	=	0.550427	/	0.565346
	=	0.9736

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than Property, Plant and Equipment to Total Assets.

AQI	=	(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)	/	(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
	=	(1 - (27519.243 + 8081.069) / 121039.439)	/	(1 - (25959.585 + 7946.697) / 121173.777)
	=	0.705878	/	0.720185
	=	0.9801

4. SGI = Sales Growth Index

Ratio of Revenue in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI	=	Sales_t	/	Sales_t-1
	=	Revenue_t	/	Revenue_t-1
	=	57378.097	/	57173.721
	=	1.0036

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI	=	(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1))	/	(Depreciation_t / (Depreciaton_t + PPE_t))
	=	(4094.656 / (4094.656 + 7946.697))	/	(4313.287 / (4313.287 + 8081.069))
	=	0.340049	/	0.348004
	=	0.9771

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI	=	(SGA_t / Sales_t)	/	(SGA_t-1 /Sales_t-1)
	=	(17738.635 / 57378.097)	/	(16773.495 / 57173.721)
	=	0.309153	/	0.293378
	=	1.0538

7. LVGI = Leverage Index

The ratio of total debt to Total Assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase in leverage

LVGI	=	((LTD_t + CurrentLiabilities_t) / TotalAssets_t)	/	((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
	=	((50219.037 + 25996.553) / 121039.439)	/	((48071.848 + 28677.822) / 121173.777)
	=	0.629676	/	0.633385
	=	0.9941

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA	=	(IncomefromContinuingOperations_t	-	CashFlowsfromOperations_t)	/	TotalAssets_t
	=	(NetIncome_t - NonOperatingIncome_t	-	CashFlowsfromOperations_t)	/	TotalAssets_t
	=	(5898.152 - -1459.644	-	12442.226)	/	121039.439
	=	-0.042006

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

International Business Machines has a M-score of -2.67 suggests that the company is unlikely to be a manipulator.

International Business Machines Beneish M-Score Related Terms

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International Business Machines Business Description

Industry

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Comparable Companies

Traded in Other Exchanges

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Address

One New Orchard Road, Armonk, NY, USA, 10504

Website

http://www.ibm.com

IBM looks to be a part of every aspect of an enterprise's IT needs. The company primarily sells software, IT services, consulting, and hardware. IBM operates in 175 countries and employs approximately 350,000 people. The company has a robust roster of 80,000 business partners to service 5,200 clients, which includes 95% of all Fortune 500. While IBM is a B2B company, IBM's outward impact is substantial. For example, IBM manages 90% of all credit card transactions globally and is responsible for 50% of all wireless connections in the world.