Financial statements analysis and stock valuation

Income Statement

The income statement (statement of earnings) reports on the performance of International Business Machines Corp., the result of its operating activities.

Present Value of Free Cash Flow to the Firm (FCFF)

The FCFF valuation approach estimates the value of the firm as the present value of future FCFF discounted at the weighted average cost of capital (WACC).

• Intrinsic Stock Value (Valuation Summary)
• Weighted Average Cost of Capital (WACC)
• FCFF Growth Rate (g)

Statement of Comprehensive Income

Comprehensive income is the change in equity (net assets) of International Business Machines Corp. during a period from transactions and other events and circumstances from non-owners sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

DuPont Analysis: Decomposition of ROE
Quarterly Data

An approach to decomposing International Business Machines Corp.’s return on equity as the product of other financial ratios.

• Two-Component Disaggregation of ROE
• Three-Component Disaggregation of ROE
• Five-Component Disaggregation of ROE
• Two-Way Decomposition of ROA
• Four-Way Decomposition of ROA
• Decomposition of Net Profit Margin

Return on Equity (ROE)
since 2005

International Business Machines Corp.’s profitability ratio calculated as net income divided by shareholders’ equity.

• Calculation
• Comparison to Competitors
• Comparison to Software & Computer Services Sector
• Comparison to Technology Industry

Enterprise Value to EBITDA (EV/EBITDA)

To calculate EBITDA analysts start with net earnings. To that earnings number, interest, taxes, depreciation, and amortization are added. EBITDA as a pre-interest number is a flow to all providers of capital.

• Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
• EV to EBITDA Ratio, Current
• EV to EBITDA Ratio, Historical