Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company’s ability to meet long-term obligations.
Solvency Ratios (Summary)
International Business Machines Corp., solvency ratios
Based on: 10-K (filing date: 2021-02-23), 10-K (filing date: 2020-02-25), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-28).
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | International Business Machines Corp.’s debt to equity ratio deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020. |
| Debt to equity ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total shareholders’ equity. | International Business Machines Corp.’s debt to equity ratio (including operating lease liability) deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020. |
| Debt to capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | International Business Machines Corp.’s debt to capital ratio deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020. |
| Debt to capital ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total debt (including operating lease liability) plus shareholders’ equity. | International Business Machines Corp.’s debt to capital ratio (including operating lease liability) deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020. |
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | International Business Machines Corp.’s debt to assets ratio deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020. |
| Debt to assets ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total assets. | International Business Machines Corp.’s debt to assets ratio (including operating lease liability) deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020. |
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | International Business Machines Corp.’s financial leverage ratio decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level. |
| Solvency ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | International Business Machines Corp.’s interest coverage ratio deteriorated from 2018 to 2019 and from 2019 to 2020. |
| Fixed charge coverage ratio | A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. | International Business Machines Corp.’s fixed charge coverage ratio deteriorated from 2018 to 2019 and from 2019 to 2020. |
Debt to Equity
International Business Machines Corp., debt to equity calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 7,183 | 8,797 | 10,207 | 6,987 | 7,513 | |
| Long-term debt, excluding current maturities | 54,355 | 54,102 | 35,605 | 39,837 | 34,655 | |
| Total debt | 61,538 | 62,899 | 45,812 | 46,824 | 42,168 | |
| Total IBM stockholders’ equity | 20,597 | 20,841 | 16,796 | 17,594 | 18,246 | |
| Solvency Ratio | ||||||
| Debt to equity1 | 2.99 | 3.02 | 2.73 | 2.66 | 2.31 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Accenture PLC | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Adobe Inc. | 0.31 | 0.39 | 0.44 | 0.22 | 0.26 | |
| Autodesk Inc. | — | — | — | 2.03 | 0.92 | |
| Automatic Data Processing Inc. | 0.35 | 0.42 | 0.58 | 0.50 | 0.45 | |
| Fidelity National Information Services Inc. | 0.41 | 0.41 | 0.88 | 0.81 | 1.08 | |
| Fiserv Inc. | 0.64 | 0.66 | 2.60 | 1.79 | 1.80 | |
| Intuit Inc. | 0.66 | 0.12 | 0.19 | 0.36 | 0.86 | |
| Mastercard Inc. | 1.98 | 1.45 | 1.17 | 0.99 | 0.92 | |
| Microsoft Corp. | 0.62 | 0.77 | 0.97 | 1.23 | 0.76 | |
| Oracle Corp. | 5.93 | 2.58 | 1.33 | 1.08 | 0.93 | |
| PayPal Holdings Inc. | 0.45 | 0.29 | 0.13 | 0.06 | 0.00 | |
| salesforce.com inc. | 0.09 | 0.22 | 0.21 | 0.32 | 0.36 | |
| ServiceNow Inc. | 0.58 | 0.33 | 0.60 | 2.01 | 1.31 | |
| Visa Inc. | 0.66 | 0.48 | 0.49 | 0.56 | 0.48 | |
| Debt to Equity, Sector | ||||||
| Software & Services | 0.83 | 0.84 | 0.96 | 0.99 | 0.80 | |
| Debt to Equity, Industry | ||||||
| Information Technology | 0.83 | 0.81 | 0.81 | 0.79 | 0.65 | |
Based on: 10-K (filing date: 2021-02-23), 10-K (filing date: 2020-02-25), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-28).
1 2020 Calculation
Debt to equity = Total debt ÷ Total IBM stockholders’ equity
= 61,538 ÷ 20,597 = 2.99
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | International Business Machines Corp.’s debt to equity ratio deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020. |
Debt to Equity (including Operating Lease Liability)
International Business Machines Corp., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 7,183 | 8,797 | 10,207 | 6,987 | 7,513 | |
| Long-term debt, excluding current maturities | 54,355 | 54,102 | 35,605 | 39,837 | 34,655 | |
| Total debt | 61,538 | 62,899 | 45,812 | 46,824 | 42,168 | |
| Current operating lease liabilities | 1,357 | 1,380 | — | — | — | |
| Noncurrent operating lease liabilities | 3,574 | 3,879 | — | — | — | |
| Total debt (including operating lease liability) | 66,469 | 68,158 | 45,812 | 46,824 | 42,168 | |
| Total IBM stockholders’ equity | 20,597 | 20,841 | 16,796 | 17,594 | 18,246 | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 3.23 | 3.27 | 2.73 | 2.66 | 2.31 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Accenture PLC | 0.21 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Adobe Inc. | 0.35 | 0.39 | 0.44 | 0.22 | 0.26 | |
| Autodesk Inc. | — | — | — | 2.03 | 0.92 | |
| Automatic Data Processing Inc. | 0.43 | 0.42 | 0.58 | 0.50 | 0.45 | |
| Fidelity National Information Services Inc. | 0.42 | 0.42 | 0.88 | 0.81 | 1.08 | |
| Fiserv Inc. | 0.66 | 0.69 | 2.60 | 1.79 | 1.80 | |
| Intuit Inc. | 0.71 | 0.12 | 0.19 | 0.36 | 0.86 | |
| Mastercard Inc. | 2.12 | 1.58 | 1.17 | 0.99 | 0.92 | |
| Microsoft Corp. | 0.69 | 0.84 | 1.06 | 1.23 | 0.76 | |
| Oracle Corp. | 6.10 | 2.58 | 1.33 | 1.08 | 0.93 | |
| PayPal Holdings Inc. | 0.49 | 0.32 | 0.13 | 0.06 | 0.00 | |
| salesforce.com inc. | 0.18 | 0.22 | 0.21 | 0.32 | 0.36 | |
| ServiceNow Inc. | 0.75 | 0.53 | 0.60 | 2.01 | 1.31 | |
| Visa Inc. | 0.68 | 0.48 | 0.49 | 0.56 | 0.48 | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Software & Services | 0.90 | 0.89 | 0.99 | 0.99 | 0.80 | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.90 | 0.84 | 0.83 | 0.79 | 0.65 | |
Based on: 10-K (filing date: 2021-02-23), 10-K (filing date: 2020-02-25), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-28).
1 2020 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total IBM stockholders’ equity
= 66,469 ÷ 20,597 = 3.23
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total shareholders’ equity. | International Business Machines Corp.’s debt to equity ratio (including operating lease liability) deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020. |
Debt to Capital
International Business Machines Corp., debt to capital calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 7,183 | 8,797 | 10,207 | 6,987 | 7,513 | |
| Long-term debt, excluding current maturities | 54,355 | 54,102 | 35,605 | 39,837 | 34,655 | |
| Total debt | 61,538 | 62,899 | 45,812 | 46,824 | 42,168 | |
| Total IBM stockholders’ equity | 20,597 | 20,841 | 16,796 | 17,594 | 18,246 | |
| Total capital | 82,135 | 83,740 | 62,608 | 64,418 | 60,414 | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.75 | 0.75 | 0.73 | 0.73 | 0.70 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Accenture PLC | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Adobe Inc. | 0.24 | 0.28 | 0.31 | 0.18 | 0.20 | |
| Autodesk Inc. | 1.07 | 1.11 | 1.19 | 0.67 | 0.48 | |
| Automatic Data Processing Inc. | 0.26 | 0.30 | 0.37 | 0.33 | 0.31 | |
| Fidelity National Information Services Inc. | 0.29 | 0.29 | 0.47 | 0.45 | 0.52 | |
| Fiserv Inc. | 0.39 | 0.40 | 0.72 | 0.64 | 0.64 | |
| Intuit Inc. | 0.40 | 0.10 | 0.16 | 0.26 | 0.46 | |
| Mastercard Inc. | 0.66 | 0.59 | 0.54 | 0.50 | 0.48 | |
| Microsoft Corp. | 0.38 | 0.43 | 0.49 | 0.55 | 0.43 | |
| Oracle Corp. | 0.86 | 0.72 | 0.57 | 0.52 | 0.48 | |
| PayPal Holdings Inc. | 0.31 | 0.23 | 0.11 | 0.06 | 0.00 | |
| salesforce.com inc. | 0.08 | 0.18 | 0.18 | 0.24 | 0.26 | |
| ServiceNow Inc. | 0.37 | 0.25 | 0.37 | 0.67 | 0.57 | |
| Visa Inc. | 0.40 | 0.33 | 0.33 | 0.36 | 0.33 | |
| Debt to Capital, Sector | ||||||
| Software & Services | 0.45 | 0.46 | 0.49 | 0.50 | 0.45 | |
| Debt to Capital, Industry | ||||||
| Information Technology | 0.45 | 0.45 | 0.45 | 0.44 | 0.39 | |
Based on: 10-K (filing date: 2021-02-23), 10-K (filing date: 2020-02-25), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-28).
1 2020 Calculation
Debt to capital = Total debt ÷ Total capital
= 61,538 ÷ 82,135 = 0.75
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | International Business Machines Corp.’s debt to capital ratio deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020. |
Debt to Capital (including Operating Lease Liability)
International Business Machines Corp., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 7,183 | 8,797 | 10,207 | 6,987 | 7,513 | |
| Long-term debt, excluding current maturities | 54,355 | 54,102 | 35,605 | 39,837 | 34,655 | |
| Total debt | 61,538 | 62,899 | 45,812 | 46,824 | 42,168 | |
| Current operating lease liabilities | 1,357 | 1,380 | — | — | — | |
| Noncurrent operating lease liabilities | 3,574 | 3,879 | — | — | — | |
| Total debt (including operating lease liability) | 66,469 | 68,158 | 45,812 | 46,824 | 42,168 | |
| Total IBM stockholders’ equity | 20,597 | 20,841 | 16,796 | 17,594 | 18,246 | |
| Total capital (including operating lease liability) | 87,066 | 88,999 | 62,608 | 64,418 | 60,414 | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.76 | 0.77 | 0.73 | 0.73 | 0.70 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Accenture PLC | 0.17 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Adobe Inc. | 0.26 | 0.28 | 0.31 | 0.18 | 0.20 | |
| Autodesk Inc. | 1.06 | 1.11 | 1.19 | 0.67 | 0.48 | |
| Automatic Data Processing Inc. | 0.30 | 0.30 | 0.37 | 0.33 | 0.31 | |
| Fidelity National Information Services Inc. | 0.29 | 0.30 | 0.47 | 0.45 | 0.52 | |
| Fiserv Inc. | 0.40 | 0.41 | 0.72 | 0.64 | 0.64 | |
| Intuit Inc. | 0.42 | 0.10 | 0.16 | 0.26 | 0.46 | |
| Mastercard Inc. | 0.68 | 0.61 | 0.54 | 0.50 | 0.48 | |
| Microsoft Corp. | 0.41 | 0.46 | 0.51 | 0.55 | 0.43 | |
| Oracle Corp. | 0.86 | 0.72 | 0.57 | 0.52 | 0.48 | |
| PayPal Holdings Inc. | 0.33 | 0.24 | 0.11 | 0.06 | 0.00 | |
| salesforce.com inc. | 0.16 | 0.18 | 0.18 | 0.24 | 0.26 | |
| ServiceNow Inc. | 0.43 | 0.35 | 0.37 | 0.67 | 0.57 | |
| Visa Inc. | 0.40 | 0.33 | 0.33 | 0.36 | 0.33 | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Software & Services | 0.47 | 0.47 | 0.50 | 0.50 | 0.45 | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.47 | 0.46 | 0.45 | 0.44 | 0.39 | |
Based on: 10-K (filing date: 2021-02-23), 10-K (filing date: 2020-02-25), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-28).
1 2020 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 66,469 ÷ 87,066 = 0.76
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to capital ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total debt (including operating lease liability) plus shareholders’ equity. | International Business Machines Corp.’s debt to capital ratio (including operating lease liability) deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020. |
Debt to Assets
International Business Machines Corp., debt to assets calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 7,183 | 8,797 | 10,207 | 6,987 | 7,513 | |
| Long-term debt, excluding current maturities | 54,355 | 54,102 | 35,605 | 39,837 | 34,655 | |
| Total debt | 61,538 | 62,899 | 45,812 | 46,824 | 42,168 | |
| Total assets | 155,971 | 152,186 | 123,382 | 125,356 | 117,470 | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.39 | 0.41 | 0.37 | 0.37 | 0.36 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Accenture PLC | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Adobe Inc. | 0.17 | 0.20 | 0.22 | 0.13 | 0.15 | |
| Autodesk Inc. | 0.34 | 0.44 | 0.39 | 0.31 | 0.27 | |
| Automatic Data Processing Inc. | 0.05 | 0.05 | 0.05 | 0.05 | 0.05 | |
| Fidelity National Information Services Inc. | 0.24 | 0.24 | 0.38 | 0.36 | 0.40 | |
| Fiserv Inc. | 0.28 | 0.28 | 0.53 | 0.48 | 0.47 | |
| Intuit Inc. | 0.31 | 0.07 | 0.08 | 0.12 | 0.24 | |
| Mastercard Inc. | 0.38 | 0.29 | 0.25 | 0.25 | 0.28 | |
| Microsoft Corp. | 0.24 | 0.27 | 0.31 | 0.37 | 0.28 | |
| Oracle Corp. | 0.62 | 0.52 | 0.44 | 0.43 | 0.39 | |
| PayPal Holdings Inc. | 0.13 | 0.10 | 0.05 | 0.02 | 0.00 | |
| salesforce.com inc. | 0.06 | 0.11 | 0.10 | 0.14 | 0.14 | |
| ServiceNow Inc. | 0.19 | 0.12 | 0.17 | 0.35 | 0.25 | |
| Visa Inc. | 0.30 | 0.23 | 0.24 | 0.27 | 0.25 | |
| Debt to Assets, Sector | ||||||
| Software & Services | 0.28 | 0.28 | 0.29 | 0.31 | 0.27 | |
| Debt to Assets, Industry | ||||||
| Information Technology | 0.29 | 0.29 | 0.29 | 0.30 | 0.27 | |
Based on: 10-K (filing date: 2021-02-23), 10-K (filing date: 2020-02-25), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-28).
1 2020 Calculation
Debt to assets = Total debt ÷ Total assets
= 61,538 ÷ 155,971 = 0.39
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | International Business Machines Corp.’s debt to assets ratio deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020. |
Debt to Assets (including Operating Lease Liability)
International Business Machines Corp., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 7,183 | 8,797 | 10,207 | 6,987 | 7,513 | |
| Long-term debt, excluding current maturities | 54,355 | 54,102 | 35,605 | 39,837 | 34,655 | |
| Total debt | 61,538 | 62,899 | 45,812 | 46,824 | 42,168 | |
| Current operating lease liabilities | 1,357 | 1,380 | — | — | — | |
| Noncurrent operating lease liabilities | 3,574 | 3,879 | — | — | — | |
| Total debt (including operating lease liability) | 66,469 | 68,158 | 45,812 | 46,824 | 42,168 | |
| Total assets | 155,971 | 152,186 | 123,382 | 125,356 | 117,470 | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.43 | 0.45 | 0.37 | 0.37 | 0.36 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Accenture PLC | 0.09 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Adobe Inc. | 0.19 | 0.20 | 0.22 | 0.13 | 0.15 | |
| Autodesk Inc. | 0.41 | 0.44 | 0.39 | 0.31 | 0.27 | |
| Automatic Data Processing Inc. | 0.06 | 0.05 | 0.05 | 0.05 | 0.05 | |
| Fidelity National Information Services Inc. | 0.25 | 0.25 | 0.38 | 0.36 | 0.40 | |
| Fiserv Inc. | 0.29 | 0.29 | 0.53 | 0.48 | 0.47 | |
| Intuit Inc. | 0.33 | 0.07 | 0.08 | 0.12 | 0.24 | |
| Mastercard Inc. | 0.40 | 0.32 | 0.25 | 0.25 | 0.28 | |
| Microsoft Corp. | 0.27 | 0.30 | 0.34 | 0.37 | 0.28 | |
| Oracle Corp. | 0.64 | 0.52 | 0.44 | 0.43 | 0.39 | |
| PayPal Holdings Inc. | 0.14 | 0.11 | 0.05 | 0.02 | 0.00 | |
| salesforce.com inc. | 0.11 | 0.11 | 0.10 | 0.14 | 0.14 | |
| ServiceNow Inc. | 0.24 | 0.19 | 0.17 | 0.35 | 0.25 | |
| Visa Inc. | 0.30 | 0.23 | 0.24 | 0.27 | 0.25 | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Software & Services | 0.31 | 0.30 | 0.30 | 0.31 | 0.27 | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.31 | 0.30 | 0.29 | 0.30 | 0.27 | |
Based on: 10-K (filing date: 2021-02-23), 10-K (filing date: 2020-02-25), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-28).
1 2020 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 66,469 ÷ 155,971 = 0.43
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to assets ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total assets. | International Business Machines Corp.’s debt to assets ratio (including operating lease liability) deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020. |
Financial Leverage
International Business Machines Corp., financial leverage calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 155,971 | 152,186 | 123,382 | 125,356 | 117,470 | |
| Total IBM stockholders’ equity | 20,597 | 20,841 | 16,796 | 17,594 | 18,246 | |
| Solvency Ratio | ||||||
| Financial leverage1 | 7.57 | 7.30 | 7.35 | 7.12 | 6.44 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Accenture PLC | 2.18 | 2.07 | 2.36 | 2.54 | 2.73 | |
| Adobe Inc. | 1.83 | 1.97 | 2.00 | 1.72 | 1.71 | |
| Autodesk Inc. | — | — | — | 6.54 | 3.41 | |
| Automatic Data Processing Inc. | 6.81 | 7.76 | 10.72 | 9.35 | 9.74 | |
| Fidelity National Information Services Inc. | 1.70 | 1.70 | 2.33 | 2.26 | 2.67 | |
| Fiserv Inc. | 2.31 | 2.35 | 4.91 | 3.77 | 3.83 | |
| Intuit Inc. | 2.14 | 1.68 | 2.20 | 3.00 | 3.66 | |
| Mastercard Inc. | 5.25 | 4.96 | 4.61 | 3.90 | 3.30 | |
| Microsoft Corp. | 2.55 | 2.80 | 3.13 | 3.33 | 2.69 | |
| Oracle Corp. | 9.56 | 4.99 | 3.00 | 2.51 | 2.37 | |
| PayPal Holdings Inc. | 3.52 | 3.04 | 2.82 | 2.55 | 2.25 | |
| salesforce.com inc. | 1.63 | 1.97 | 2.24 | 2.34 | 2.55 | |
| ServiceNow Inc. | 3.07 | 2.83 | 3.49 | 5.82 | 5.26 | |
| Visa Inc. | 2.23 | 2.09 | 2.04 | 2.08 | 1.95 | |
| Financial Leverage, Sector | ||||||
| Software & Services | 2.94 | 2.98 | 3.25 | 3.17 | 2.93 | |
| Financial Leverage, Industry | ||||||
| Information Technology | 2.87 | 2.81 | 2.83 | 2.63 | 2.44 | |
Based on: 10-K (filing date: 2021-02-23), 10-K (filing date: 2020-02-25), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-28).
1 2020 Calculation
Financial leverage = Total assets ÷ Total IBM stockholders’ equity
= 155,971 ÷ 20,597 = 7.57
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | International Business Machines Corp.’s financial leverage ratio decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level. |
Interest Coverage
International Business Machines Corp., interest coverage calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to IBM | 5,590 | 9,431 | 8,728 | 5,753 | 11,872 | |
| Add: Net income attributable to noncontrolling interest | 22 | 25 | 17 | 17 | 16 | |
| Less: Income (loss) from discontinued operations, net of tax | 89 | (4) | 5 | (5) | (9) | |
| Add: Income tax expense | (864) | 731 | 2,619 | 5,642 | 449 | |
| Add: Interest expense | 1,288 | 1,344 | 723 | 615 | 630 | |
| Earnings before interest and tax (EBIT) | 5,947 | 11,535 | 12,082 | 12,032 | 12,976 | |
| Solvency Ratio | ||||||
| Interest coverage1 | 4.62 | 8.58 | 16.71 | 19.56 | 20.60 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Accenture PLC | 205.84 | 273.26 | 298.26 | 297.95 | 345.67 | |
| Adobe Inc. | 37.00 | 21.38 | 32.31 | 29.73 | 21.37 | |
| Autodesk Inc. | 6.46 | 0.18 | -15.15 | -16.64 | 0.40 | |
| Automatic Data Processing Inc. | 30.72 | 24.14 | 22.14 | 32.64 | 40.76 | |
| Fidelity National Information Services Inc. | 1.77 | 2.04 | 4.47 | 3.88 | 3.25 | |
| Fiserv Inc. | 2.64 | 3.19 | 9.11 | 8.90 | 9.72 | |
| Intuit Inc. | 158.00 | 126.40 | 76.15 | 45.10 | 35.37 | |
| Mastercard Inc. | 21.42 | 44.44 | 39.73 | 43.35 | 60.43 | |
| Microsoft Corp. | 21.47 | 17.27 | 14.35 | 11.42 | 16.89 | |
| Oracle Corp. | 7.13 | 6.97 | 7.43 | 7.47 | 8.88 | |
| PayPal Holdings Inc. | 25.23 | 27.07 | 31.86 | 315.29 | 544.67 | |
| salesforce.com inc. | 6.39 | 7.38 | 3.32 | 1.29 | 1.89 | |
| ServiceNow Inc. | 5.56 | 3.02 | 0.26 | -1.79 | -12.52 | |
| Visa Inc. | 27.72 | 28.92 | 21.92 | 21.77 | 19.76 | |
| Interest Coverage, Sector | ||||||
| Software & Services | 14.55 | 14.12 | 14.45 | 13.61 | 16.02 | |
| Interest Coverage, Industry | ||||||
| Information Technology | 16.72 | 16.24 | 18.10 | 17.31 | 19.12 | |
Based on: 10-K (filing date: 2021-02-23), 10-K (filing date: 2020-02-25), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-28).
1 2020 Calculation
Interest coverage = EBIT ÷ Interest expense
= 5,947 ÷ 1,288 = 4.62
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | International Business Machines Corp.’s interest coverage ratio deteriorated from 2018 to 2019 and from 2019 to 2020. |
Fixed Charge Coverage
International Business Machines Corp., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to IBM | 5,590 | 9,431 | 8,728 | 5,753 | 11,872 | |
| Add: Net income attributable to noncontrolling interest | 22 | 25 | 17 | 17 | 16 | |
| Less: Income (loss) from discontinued operations, net of tax | 89 | (4) | 5 | (5) | (9) | |
| Add: Income tax expense | (864) | 731 | 2,619 | 5,642 | 449 | |
| Add: Interest expense | 1,288 | 1,344 | 723 | 615 | 630 | |
| Earnings before interest and tax (EBIT) | 5,947 | 11,535 | 12,082 | 12,032 | 12,976 | |
| Add: Operating lease cost | 1,581 | 1,645 | 1,944 | 1,821 | 1,508 | |
| Earnings before fixed charges and tax | 7,528 | 13,180 | 14,026 | 13,853 | 14,484 | |
| Interest expense | 1,288 | 1,344 | 723 | 615 | 630 | |
| Operating lease cost | 1,581 | 1,645 | 1,944 | 1,821 | 1,508 | |
| Fixed charges | 2,869 | 2,989 | 2,667 | 2,436 | 2,138 | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 2.62 | 4.41 | 5.26 | 5.69 | 6.77 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Accenture PLC | 9.66 | 10.07 | 9.63 | 8.30 | 10.43 | |
| Adobe Inc. | 18.77 | 10.78 | 13.34 | 12.26 | 9.79 | |
| Autodesk Inc. | 3.09 | 0.62 | -5.16 | -4.51 | 0.78 | |
| Automatic Data Processing Inc. | 12.22 | 8.51 | 7.43 | 9.05 | 7.82 | |
| Fidelity National Information Services Inc. | 1.47 | 1.75 | 3.36 | 3.10 | 2.66 | |
| Fiserv Inc. | 2.28 | 2.56 | 6.03 | 5.60 | 6.08 | |
| Intuit Inc. | 27.48 | 34.00 | 26.91 | 22.03 | 17.94 | |
| Mastercard Inc. | 16.43 | 31.13 | 25.01 | 26.78 | 33.08 | |
| Microsoft Corp. | 12.44 | 10.94 | 9.45 | 7.57 | 9.81 | |
| Oracle Corp. | 5.68 | 5.50 | 6.38 | 6.39 | 7.44 | |
| PayPal Holdings Inc. | 14.51 | 12.94 | 14.89 | 29.95 | 21.65 | |
| salesforce.com inc. | 1.68 | 2.89 | 1.54 | 1.08 | 1.26 | |
| ServiceNow Inc. | 2.29 | 1.69 | 0.61 | -0.55 | -5.67 | |
| Visa Inc. | 22.89 | 19.17 | 16.32 | 17.20 | 15.28 | |
| Fixed Charge Coverage, Sector | ||||||
| Software & Services | 8.32 | 8.39 | 8.33 | 7.77 | 8.60 | |
| Fixed Charge Coverage, Industry | ||||||
| Information Technology | 10.36 | 10.69 | 11.65 | 10.94 | 11.53 | |
Based on: 10-K (filing date: 2021-02-23), 10-K (filing date: 2020-02-25), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-28).
1 2020 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 7,528 ÷ 2,869 = 2.62
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Fixed charge coverage ratio | A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. | International Business Machines Corp.’s fixed charge coverage ratio deteriorated from 2018 to 2019 and from 2019 to 2020. |