International Business Machines Corp. (NYSE:IBM)

The analysis of the presented annual financial data reveals notable trends in the asset composition over the five-year period ending December 31, 2024.

Cash and Cash Equivalents

This category exhibited a decrease from 8.47% in 2020 to a low of 5.04% in 2021, followed by a recovery to 10.17% in 2024, representing an overall increasing trend in liquidity relative to total assets.

Restricted Cash

Restricted cash as a percentage of total assets declined from 0.3% in 2020 to 0.02% in 2023, before rising slightly to 0.16% in 2024, indicating low and fluctuating levels of restricted funds.

Marketable Securities

Marketable securities started at 0.38% in 2020, increased to a peak of 0.67% in 2022, then decreased to 0.28% in 2023, with a minor rebound to 0.47% in 2024, showing variability but overall low allocation.

Receivables

Trade receivables net of allowances gradually increased from 4.57% in 2020 to a peak of 5.33% in 2023, followed by a slight decline to 4.96% in 2024. Short-term financing receivables held for investment reduced steadily from 6.98% in 2020 to 4.56% in 2024. Conversely, short-term financing receivables held for sale appeared in 2021 and fluctuated between 0.51% and 0.74%, suggesting changes in classification or sale strategy. Other accounts receivable increased overall from 0.46% to 0.69%. These shifts imply shifting credit or financing policies affecting asset quality and liquidity.

Inventory and Deferred Costs

Inventory remained relatively stable, with a slight decrease from 1.18% in 2020 to 0.94% in 2024. Deferred costs—both current and non-current—showed a general declining pattern over the period, indicating improved expense recognition or asset utilization.

Prepaid Expenses and Other Current Assets

This category saw a rise to 2.63% in 2021 from 1.41% in 2020 but declined afterwards to 1.84% in 2024, indicating temporary increases in prepayments or other current items followed by normalization.

Current Assets

Total current assets as a percentage of total assets decreased initially from 25.11% in 2020 to 22.38% in 2021, then rebounded to 25.14% in 2024. This suggests a cyclical approach to maintaining liquid assets.

Property, Plant and Equipment (PP&E) and Operating Right-of-Use Assets

PP&E declined from 6.44% of total assets in 2020 to 4.18% in 2024, showing a gradual reduction or divestment. Similarly, operating right-of-use assets decreased moderately from 3.00% to 2.33%, indicating possible reductions in leased asset commitments.

Long-Term Financing Receivables

Long-term financing receivables decreased from 4.54% to 3.90%, reflecting a cautious stance or collection of longer-term financing.

Prepaid Pension Assets

Prepaid pension assets exhibited an increase from 4.88% in 2020 to 7.46% in 2021, then declined steadily to 5.46% by 2024, suggesting fluctuating pension funding status or actuarial assumptions.

Deferred Taxes

Deferred taxes showed a modest decline from 5.92% in 2020 to 4.92% in 2022 and 2023, with a slight increase to 5.09% in 2024, indicating stable tax deferral balances relative to assets.

Goodwill and Intangible Assets

Goodwill represented the largest noncurrent asset component, rising from 38.22% in 2020 to a peak of 44.50% in 2023 before a slight reduction to 44.25% in 2024. Intangible assets, net, showed a decline from 8.85% to 7.77%, reflecting amortization or disposals. The dominance and slight increase in goodwill suggest acquisition activity or asset revaluation sustaining intangible asset growth.

Investments and Sundry Assets

This category remained relatively stable, decreasing marginally from 1.46% to 1.30%, indicating consistent minor asset holdings.

Noncurrent vs. Total Assets

Noncurrent assets constituted the majority share, ranging between 74.86% and 77.62%, with a slight downward trend from 77.62% in 2021 to 74.86% in 2024, reflecting a minor shift toward current asset holdings.

In summary, the asset structure indicates an overall emphasis on noncurrent intangible assets, particularly goodwill, with moderate fluctuations in liquidity and receivables. The company appears to manage its working capital dynamically, maintaining a balanced proportion of current assets while gradually reducing physical and financed asset holdings. Pension assets and deferred taxes show variability but no alarming trends. These patterns suggest strategic management of asset composition with attention to maintaining operational liquidity and managing intangible asset bases.