- Compute the five component ratios of a decomposition of ROE (net profit margin, total asset turnover, return on assets, financial leverage, return on equity) for IBM’s fiscal years 2016-2019 (present your results)
- What patterns do you see in these ratios? What are the implications of these patterns? Be specific.
- Compute the gross margin percentage, by quarter, for each of IBM’s business segments (present your results).
- What patterns do you see? Be specific. What are the implications of these patterns for the company overall?
- Compute the year-to-year change, by quarter, in Revenues for each of IBM’s business segments (present your results).
- What patterns to you see? Be specific. What are the implications of these patterns for the company overall?
- Compute the year-to-year change in gross margin percentage, by quarter, for each of IBM’s business segments (present your results).
- What patterns to you see? Be specific. What are the implications of these patterns for the company overall?
- Which segment(s) are positively (negatively) influencing IBM’s recent performance? Be specific. What are the implications of this for the company overall?
- What does your analysis indicate regarding IBM’s future performance?
Sample Solution
