Stock Analysis on Net

International Business Machines Corp. (NYSE:IBM)

Analysis of Investments

Microsoft Excel

Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities

International Business Machines Corp., adjustment to net income attributable to IBM

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net income attributable to IBM (as reported) 7,502 1,639 5,743 5,590 9,431
Add: Net changes related to available-for-sale securities, net of tax amount (1) 1
Net income attributable to IBM (adjusted) 7,502 1,638 5,743 5,590 9,432

Based on: 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), 10-K (reporting date: 2019-12-31).


Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)

International Business Machines Corp., adjusted profitability ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net Profit Margin
Reported net profit margin 12.13% 2.71% 10.01% 7.59% 12.22%
Adjusted net profit margin 12.13% 2.71% 10.01% 7.59% 12.23%
Return on Equity (ROE)
Reported ROE 33.29% 7.47% 30.38% 27.14% 45.25%
Adjusted ROE 33.29% 7.46% 30.38% 27.14% 45.26%
Return on Assets (ROA)
Reported ROA 5.55% 1.29% 4.35% 3.58% 6.20%
Adjusted ROA 5.55% 1.29% 4.35% 3.58% 6.20%

Based on: 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), 10-K (reporting date: 2019-12-31).

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. International Business Machines Corp. adjusted net profit margin ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. International Business Machines Corp. adjusted ROE deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. International Business Machines Corp. adjusted ROA deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

International Business Machines Corp., Profitability Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to IBM 7,502 1,639 5,743 5,590 9,431
Revenue 61,860 60,530 57,350 73,620 77,147
Profitability Ratio
Net profit margin1 12.13% 2.71% 10.01% 7.59% 12.22%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income attributable to IBM 7,502 1,638 5,743 5,590 9,432
Revenue 61,860 60,530 57,350 73,620 77,147
Profitability Ratio
Adjusted net profit margin2 12.13% 2.71% 10.01% 7.59% 12.23%

Based on: 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), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Net profit margin = 100 × Net income attributable to IBM ÷ Revenue
= 100 × 7,502 ÷ 61,860 = 12.13%

2 Adjusted net profit margin = 100 × Adjusted net income attributable to IBM ÷ Revenue
= 100 × 7,502 ÷ 61,860 = 12.13%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. International Business Machines Corp. adjusted net profit margin ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to IBM 7,502 1,639 5,743 5,590 9,431
Total IBM stockholders’ equity 22,533 21,944 18,901 20,597 20,841
Profitability Ratio
ROE1 33.29% 7.47% 30.38% 27.14% 45.25%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income attributable to IBM 7,502 1,638 5,743 5,590 9,432
Total IBM stockholders’ equity 22,533 21,944 18,901 20,597 20,841
Profitability Ratio
Adjusted ROE2 33.29% 7.46% 30.38% 27.14% 45.26%

Based on: 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), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROE = 100 × Net income attributable to IBM ÷ Total IBM stockholders’ equity
= 100 × 7,502 ÷ 22,533 = 33.29%

2 Adjusted ROE = 100 × Adjusted net income attributable to IBM ÷ Total IBM stockholders’ equity
= 100 × 7,502 ÷ 22,533 = 33.29%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. International Business Machines Corp. adjusted ROE deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to IBM 7,502 1,639 5,743 5,590 9,431
Total assets 135,241 127,243 132,001 155,971 152,186
Profitability Ratio
ROA1 5.55% 1.29% 4.35% 3.58% 6.20%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income attributable to IBM 7,502 1,638 5,743 5,590 9,432
Total assets 135,241 127,243 132,001 155,971 152,186
Profitability Ratio
Adjusted ROA2 5.55% 1.29% 4.35% 3.58% 6.20%

Based on: 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), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROA = 100 × Net income attributable to IBM ÷ Total assets
= 100 × 7,502 ÷ 135,241 = 5.55%

2 Adjusted ROA = 100 × Adjusted net income attributable to IBM ÷ Total assets
= 100 × 7,502 ÷ 135,241 = 5.55%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. International Business Machines Corp. adjusted ROA deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.