Stock Analysis on Net

International Business Machines Corp. (NYSE:IBM)

Financial Reporting Quality: Aggregate Accruals

Microsoft Excel

Balance-Sheet-Based Accruals Ratio

International Business Machines Corp., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Operating Assets
Total assets 137,175 135,241 127,243 132,001 155,971
Less: Cash and cash equivalents 13,947 13,068 7,886 6,650 13,212
Less: Restricted cash 214 21 103 307 463
Less: Marketable securities 644 373 852 600 600
Operating assets 122,370 121,779 118,402 124,444 141,696
Operating Liabilities
Total liabilities 109,783 112,628 105,222 113,005 135,244
Less: Short-term debt 5,089 6,426 4,760 6,787 7,183
Less: Long-term debt, excluding current maturities 49,884 50,121 46,189 44,917 54,355
Operating liabilities 54,810 56,081 54,273 61,301 73,706
 
Net operating assets1 67,560 65,698 64,129 63,143 67,990
Balance-sheet-based aggregate accruals2 1,862 1,569 986 (4,847)
Financial Ratio
Balance-sheet-based accruals ratio3 2.79% 2.42% 1.55% -7.39%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Accenture PLC 35.69% 16.32% 21.70% 27.93% 3.73%
Adobe Inc. -3.83% 1.85% -8.24% 14.14% 8.20%
Cadence Design Systems Inc. 39.84% 11.17% 26.65% 4.43%
CrowdStrike Holdings Inc.
Intuit Inc. 3.35% -1.74% 85.68% 139.73% -1.39%
Microsoft Corp. 52.18% 22.96% 42.27% 40.52% 14.41%
Oracle Corp. 4.30% 51.77% 9.90% 5.62% 1.35%
Palantir Technologies Inc.
Palo Alto Networks Inc. 89.91% 137.01% -124.73% 85.21% 69.06%
Salesforce Inc. -2.46% -2.30% 57.74% 10.87%
ServiceNow Inc. 22.91% 61.79% 12.89% 34.89%
Synopsys Inc. 7.85% 13.85% 5.01% 0.36% 8.40%
Workday Inc. 28.44% -11.24% 55.93% -15.99%
Balance-Sheet-Based Accruals Ratio, Sector
Software & Services 26.40% 18.49% 29.52% 16.75%
Balance-Sheet-Based Accruals Ratio, Industry
Information Technology 21.52% 8.96% 18.15% 19.20%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Net operating assets = Operating assets – Operating liabilities
= 122,37054,810 = 67,560

2 2024 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2024 – Net operating assets2023
= 67,56065,698 = 1,862

3 2024 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 1,862 ÷ [(67,560 + 65,698) ÷ 2] = 2.79%

4 Click competitor name to see calculations.

Financial ratio Description The company
Balance-sheet-based accruals ratio Ratio is found by dividing balance-sheet-based aggregate accruals by average net operating assets. Using the balance-sheet-based accruals ratio, International Business Machines Corp. deteriorated earnings quality from 2023 to 2024.

Cash-Flow-Statement-Based Accruals Ratio

International Business Machines Corp., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net income attributable to IBM 6,023 7,502 1,639 5,743 5,590
Less: Net cash provided by operating activities 13,445 13,931 10,435 12,796 18,197
Less: Net cash used in investing activities (4,937) (7,070) (4,202) (5,975) (3,028)
Cash-flow-statement-based aggregate accruals (2,485) 641 (4,594) (1,078) (9,579)
Financial Ratio
Cash-flow-statement-based accruals ratio1 -3.73% 0.99% -7.22% -1.64%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Accenture PLC 24.31% -0.19% 11.87% 11.80% -13.65%
Adobe Inc. -21.90% -21.73% -19.93% 9.21% -0.48%
Cadence Design Systems Inc. 17.36% 3.78% 15.03% -5.75%
CrowdStrike Holdings Inc.
Intuit Inc. -8.44% -8.74% 25.60% 58.72% -34.22%
Microsoft Corp. 30.89% 5.22% 13.42% 17.68% -8.19%
Oracle Corp. -1.01% 42.79% -30.58% 25.81% -31.35%
Palantir Technologies Inc.
Palo Alto Networks Inc. 33.84% -37.95% -196.64% -68.30% -488.47%
Salesforce Inc. -8.44% -8.49% 21.96% 10.57%
ServiceNow Inc. -7.12% 15.44% 8.80% -21.14%
Synopsys Inc. -7.64% 0.20% -4.64% -4.88% 0.92%
Workday Inc. 34.56% 18.64% -0.65% -18.51%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Software & Services 12.14% 7.40% 2.02% 11.27%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Information Technology 6.37% 1.46% 2.95% 8.70%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 2024 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -2,485 ÷ [(67,560 + 65,698) ÷ 2] = -3.73%

2 Click competitor name to see calculations.

Financial ratio Description The company
Cash-flow-statement-based accruals ratio Ratio is found by dividing cash-flow-statement-based aggregate accruals by average net operating assets. Using the cash-flow-statement-based accruals ratio, International Business Machines Corp. deteriorated earnings quality from 2023 to 2024.