In calculating the Net-Net Working Capital (NNWC), Benjamin Graham assumed that a company's accounts receivable is only worth 75% its value, its inventory is only worth 50% of its value, but its liabilities have to be paid in full. In addition, Graham believed that preferred stock belongs on the liability side of the balance sheet, not as part of capital and surplus. This is a conservative way of estimating the company's value.
XSWX:IBM's Price-to-Net-Net-Working-Capital is not ranked *
in the Software industry.
Industry Median: 6.84 * Ranked among companies with meaningful Price-to-Net-Net-Working-Capital only.
International Business Machines (XSWX:IBM) Net-Net Working Capital Explanation
One research study, covering the years 1970 through 1983 showed that portfolios picked at the beginning of each year, and held for one year, returned 29.4 percent, on average, over the 13-year period, compared to 11.5 percent for the S&P 500 Index. Other studies of Graham's strategy produced similar results.
Benjamin Graham looked for companies whose market values were less than two-thirds of their net-net value. They are collected under our Net-Net screener.
International Business Machines Net-Net Working Capital Related Terms
International Business Machines Net-Net Working Capital Historical Data
* 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.
International Business Machines Net-Net Working Capital Chart
XSWX:IBM vs ACN, FISV, FIS: Net-Net Working Capital Comparison
For the Information Technology Services subindustry, International Business Machines's Price-to-Net-Net-Working-Capital, along with its competitors' market caps and Price-to-Net-Net-Working-Capital 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 Price-to-Net-Net-Working-Capital vs Software Industry
For the Software industry and Technology sector, International Business Machines's Price-to-Net-Net-Working-Capital distribution charts can be found below:
* The bar in red indicates where International Business Machines's Price-to-Net-Net-Working-Capital falls into.
* 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.
In calculating the Net-Net Working Capital (NNWC), Benjamin Graham assumed that a company's accounts receivable is only worth 75% its value, its inventory is only worth 50% of its value, but its liabilities have to be paid in full.
In addition, Graham believed that preferred stock belongs on the liability side of the balance sheet, not as part of capital and surplus. In "Security Analysis", preferred stock is dubbed "an imperfect creditorship position" that is best placed on the balance sheet alongside funded debt.
This is a conservative way of estimating the company's value.
What does a Net-Net Working Capital of CHF-88.68 mean?
International Business Machines (XSWX:IBM) has a Net-Net Working Capital of CHF-88.68 as of Mar. 2026. Ben Graham defined net-net working capital as the per-share sum of cash, 75% of receivables and 50% of inventory less total liabilities. View historical data on International Business Machines According to the industry distribution chart, International Business Machines ranks #999999 out of 1257 companies in the Software industry.
Is International Business Machines' Net-Net Working Capital too high?
International Business Machines' current Net-Net Working Capital is CHF-88.68. Based on the distribution chart, International Business Machines ranks #999999 out of 1257 companies in the Software industry, which is in the bottom quartile relative to peers. Overall, International Business Machines has a GF Score™ of 69/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does International Business Machines' Net-Net Working Capital compare to ACN and FISV?
According to the Software industry distribution chart, International Business Machines ranks #999999 out of 1257 companies for Net-Net Working Capital. This places International Business Machines in the lower half of its industry. The industry median Net-Net Working Capital is 6.84. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Net-Net Working Capital for a Software company?
The median Net-Net Working Capital among Software companies is 6.84, based on 1,257 companies in the industry. Companies in the top quartile (top 25%) have a Net-Net Working Capital significantly above this median, while those in the bottom quartile fall well below. However, Net-Net Working Capital should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Net-Net Working Capital mean?
A high Net-Net Working Capital can signal that a stock is expensive relative to its fundamentals. Ben Graham defined net-net working capital as the per-share sum of cash, 75% of receivables and 50% of inventory less total liabilities. View historical data on International Business Machines For the Software industry, the median Net-Net Working Capital is 6.84 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. International Business Machines's current Net-Net Working Capital is CHF-88.68. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is International Business Machines stock overvalued right now?
Based on GuruFocus' analysis, International Business Machines (XSWX:IBM) is currently considered Modestly Overvalued. The stock's GF Value™ is CHF187.83, compared to a current price of CHF230.15 — trading 22.5% above its estimated fair value. The current Net-Net Working Capital is CHF-88.68. International Business Machines' overall GF Score™ is 69/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Net-Net Working Capital calculated?
Net-Net Working Capital is calculated from a company's financial statements. For International Business Machines (XSWX:IBM), the current Net-Net Working Capital is CHF-88.68 as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is International Business Machines (XSWX:IBM) Overvalued in 2026?
Based on GuruFocus' analysis, International Business Machines stock appears to be overvalued.
The current stock price of CHF230.15 is trading 22.5% above its estimated GF Value™ of CHF187.83.
GuruFocus considers International Business Machines to be Modestly Overvalued.
Key valuation signals for XSWX:IBM:
Net-Net Working Capital: CHF-88.68
GF Value™: CHF187.83 vs. price of CHF230.15 (22.5% above fair value)
No single metric tells the full story. See the XSWX:IBM stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
International Business Machines Business Description
Incorporated in 1911, International Business Machines, or IBM, is one of the oldest technology companies in the world. It provides software, IT consulting services, and hardware to help business customers modernize their technology workflows. IBM operates in 175 countries and employs approximately 300,000 people. The company has a robust roster of business partners to service its clients, which includes 95% of all Fortune 500 companies. IBM's products, including Red Hat, watsonx, and mainframes, handle some of the world's most important data workloads in areas like finance and retail.
69GF Score
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