International Business Machines (NYSE:IBM) Financial Strength

: 5 (As of Jun. 2023)

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International Business Machines has the Financial Strength Rank of 5.

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors:

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.

International Business Machines's Interest Coverage for the quarter that ended in Jun. 2023 was 5.10. International Business Machines's debt to revenue ratio for the quarter that ended in Jun. 2023 was 0.97. As of today, International Business Machines's Altman Z-Score is 2.87.

Competitive Comparison

For the Information Technology Services subindustry, International Business Machines's Financial Strength, along with its competitors' market caps and Financial Strength 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.

Annual Data Quarterly Data

International Business Machines Financial Strength Distribution

For the Software industry and Technology sector, International Business Machines's Financial Strength distribution charts can be found below:

* The bar in red indicates where International Business Machines's Financial Strength falls in comparison to its industry or sector. The grey bar indicates the Financial Strength's extreme value range as defined by GuruFocus.

International Business Machines Financial Strength Calculation

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

International Business Machines's Interest Expense for the months ended in Jun. 2023 was $-423 Mil. Its Operating Income for the months ended in Jun. 2023 was $2,159 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Jun. 2023 was $52,677 Mil.

International Business Machines's Interest Coverage for the quarter that ended in Jun. 2023 is

Interest Coverage	=	-1	*	Operating Income (Q: Jun. 2023 )	/	Interest Expense (Q: Jun. 2023 )
	=	-1	*	2159	/	-423
	=	5.10

The higher the ratio, the stronger the company's financial strength is.

2. Debt to revenue ratio. The lower, the better.

International Business Machines's Debt to Revenue Ratio for the quarter that ended in Jun. 2023 is

Debt to Revenue Ratio	=	Total Debt (Q: Jun. 2023 )			/	Revenue
	=	(Short-Term Debt & Capital Lease Obligation	+	Long-Term Debt & Capital Lease Obligation)	/	Revenue
	=	(7627	+	52677)	/	61900
	=	0.97

3. Altman Z-Score.

Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

The zones of discrimination were as such:

When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.

International Business Machines has a Z-score of 2.87, indicating it is in Grey Zones. This implies that International Business Machines is in some kind of financial stress. If it is below 1.81, the company may faces bankrupcy risk.

Warning Sign:

Altman Z-score of 2.87 is in the grey area. This implies that the company is under some kind of financial stress. If it is below 1.8, the company may face bankruptcy risk.

* 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 (NYSE:IBM) Financial Strength Explanation

The maximum rank is 10. Companies with rank 7 or higher will be unlikely to fall into distressed situations. Companies with rank of 3 or less are likely in financial distress.

International Business Machines has the Financial Strength Rank of 5.

International Business Machines Financial Strength Related Terms

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International Business Machines (NYSE:IBM) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » International Business Machines Corp (NYSE:IBM) » Definitions » Financial Strength

Comparable Companies

Traded in Other Exchanges

IBM:Mexico IBMd:UK IBM:UK IBM:Germany IBM:Germany IBM:Germany IBM:Germany IBM:Canada IBMB34:Brazil IBMA:Belgium IBM:Austria IBM:Argentina

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.

Executives

Nicolas A. Fehring	officer: VP, Controller	ONE NEW ORCHARD ROAD, ARMONK NY 10504
Alfred W Zollar	director	C/O LOTUS SOFTWARE, ONE ROGER STREET, CAMBRIDGE MA 02142
Gary D Cohn	officer: Vice Chairman	812 PARK AVENUE, 7-8A, NEW YORK NY 10021
Nickle Jaclyn Lamoreaux	officer: Senior Vice President	IBM CORPORATION, ONE NEW ORCHARD RD, ARMONK NY 10504-1722
James M Whitehurst	officer: President	IBM CORPORATION, ONE NEW ORCHARD RD, ARMONK NY 10504-1722
Antonio N Sabas	other: Idividual	10 FULLER PLACE, 10 FULLER PLACE, IRVINGTON NJ 07111
Thomas Buberl	director	C/O AXA EQUITABLE HOLDINGS, INC., 1290 AVENUE OF THE AMERICAS, NEW YORK NY 10104
Mcnabb Frederick William Iii	director	C/O UNITEDHEALTH GROUP, 9900 BREN ROAD EAST, MN008-T502, MINNETONKA MN 55343
Michelle J Howard	director	C/O SECRETARY'S OFFICE, IBM CORPORATION, ARMONK NY 10504
Martha E Pollack	director	C/O SECRETARY'S OFFICE, IBM CORPORATION, NEW ORCHARD ROAD, ARMONK NY 10504
Joseph Swedish	director	WELLPOINT, INC., 120 MONUMENT CIRCLE, INDIANAPOLIS IN 46204
Frederick H Waddell	director	50 S. LA SALLE ST., CHICAGO IL 60675
Del Bene Robert F	officer: VP, Controller	IBM CORPORATION, ONE NEW ORCHARD RD, ARMONK NY 10504-1722
Mark Fields	director	FORD MOTOR COMPANY, ONE AMERICAN ROAD, DEARBORN MI 48126
Hutham S Olayan	director	C/O MORGAN STANLEY, 1585 BROADWAY, NEW YORK NY 10036