Common-Size Income Statement
Quarterly Data
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Assets
- Analysis of Liquidity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Present Value of Free Cash Flow to Equity (FCFE)
- Current Ratio since 2005
- Debt to Equity since 2005
- Price to Sales (P/S) since 2005
- Aggregate Accruals
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International Business Machines Corp., common-size consolidated income statement (quarterly data)
Based on: 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
The common-size income statement reveals significant fluctuations in the company’s revenue composition and profitability over the observed period. Revenue is consistently represented as 100%, allowing for a clear view of the proportional contribution of each income statement item. A notable shift in the revenue mix is observed between Services and Sales, with both experiencing periods of dominance.
- Revenue Composition: Services vs. Sales
- Services initially represented a majority of revenue, peaking at 54.72% in September 2021, but declined to a low of 40.78% in December 2025. Conversely, Sales began at 44.59% in March 2021 and increased to a high of 58.31% in December 2025. This indicates a strategic or market-driven shift towards a greater reliance on Sales revenue over time. The proportion of revenue derived from Financing remained relatively stable, fluctuating between approximately 0.91% and 1.60%.
- Cost of Revenue
- Cost of revenue as a percentage of revenue generally remained between 40% and 50% throughout the period. A slight decrease is observed in the latter half of the period, falling to 39.40% in September 2025, suggesting improved cost management or pricing strategies. However, this decrease is not consistent across all quarters.
- Gross Profit
- Gross profit percentage demonstrated volatility, ranging from a low of 51.67% in March 2022 to a high of 60.60% in September 2025. The increase in gross profit percentage in recent quarters aligns with the observed decrease in cost of revenue, indicating a positive trend in core profitability. The highest gross profit margins were observed in the latter part of 2025.
- Operating Expenses
- Selling, general, and administrative expenses consistently represented a significant portion of revenue, generally between 27% and 36%. Research and development expenses remained relatively stable, fluctuating between 9% and 13%. Intellectual property and custom development income contributed a small but positive percentage to revenue, generally between 0.85% and 1.74%. These expenses appear to be relatively consistent as a percentage of revenue.
- Operating Income
- Operating income as a percentage of revenue exhibited substantial variation. It peaked at 22.84% in December 2023 but experienced a significant decline to -5.36% in June 2024. This suggests a period of operational challenges or increased costs in the first half of 2024. A recovery is observed in subsequent quarters, reaching 23.15% in December 2025. Other income and expense also showed significant fluctuations, including a large negative impact in September 2022 (-40.80%).
- Net Income
- Net income percentage demonstrated considerable volatility, ranging from a loss of -22.66% in September 2022 to a high of 28.45% in December 2025. The negative net income in September 2022 is largely attributable to the substantial negative impact from ‘Other income and (expense)’. The significant improvement in net income in the latter part of the period suggests a successful turnaround in profitability. Income from discontinued operations also contributed to net income, though its impact varied.
Overall, the company experienced a period of fluctuating performance. While revenue composition shifted towards a greater reliance on Sales, profitability metrics demonstrated significant volatility, culminating in a strong recovery by the end of the observed period. The substantial swings in operating income and net income highlight the sensitivity of the company’s financial results to external factors and internal operational changes.