Stock Analysis on Net

International Business Machines Corp. (NYSE:IBM)

Analysis of Solvency Ratios

Microsoft Excel LibreOffice Calc

Solvency Ratios (Summary)

International Business Machines Corp., solvency ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Debt Ratios
Debt to equity 2.74 2.99 3.02 2.73 2.66
Debt to equity (including operating lease liability) 2.92 3.23 3.27 2.73 2.66
Debt to capital 0.73 0.75 0.75 0.73 0.73
Debt to capital (including operating lease liability) 0.74 0.76 0.77 0.73 0.73
Debt to assets 0.39 0.39 0.41 0.37 0.37
Debt to assets (including operating lease liability) 0.42 0.43 0.45 0.37 0.37
Financial leverage 6.98 7.57 7.30 7.35 7.12
Coverage Ratios
Interest coverage 5.20 4.62 8.58 16.71 19.56
Fixed charge coverage 3.13 2.62 4.41 5.26 5.69

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

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. debt to equity ratio improved from 2019 to 2020 and from 2020 to 2021.
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. debt to equity ratio (including operating lease liability) improved from 2019 to 2020 and from 2020 to 2021.
Debt to capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. International Business Machines Corp. debt to capital ratio improved from 2019 to 2020 and from 2020 to 2021.
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. debt to capital ratio (including operating lease liability) improved from 2019 to 2020 and from 2020 to 2021.
Debt to assets ratio A solvency ratio calculated as total debt divided by total assets. International Business Machines Corp. debt to assets ratio improved from 2019 to 2020 and from 2020 to 2021.
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. debt to assets ratio (including operating lease liability) improved from 2019 to 2020 and from 2020 to 2021.
Financial leverage ratio A solvency ratio calculated as total assets divided by total shareholders’ equity. International Business Machines Corp. financial leverage ratio increased from 2019 to 2020 but then decreased significantly from 2020 to 2021.

Solvency ratio Description The company
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. International Business Machines Corp. interest coverage ratio deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021.
Fixed charge coverage ratio A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. International Business Machines Corp. fixed charge coverage ratio deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021.

Debt to Equity

International Business Machines Corp., debt to equity calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Selected Financial Data (US$ in millions)
Short-term debt 6,787  7,183  8,797  10,207  6,987 
Long-term debt, excluding current maturities 44,917  54,355  54,102  35,605  39,837 
Total debt 51,704  61,538  62,899  45,812  46,824 
 
Total IBM stockholders’ equity 18,901  20,597  20,841  16,796  17,594 
Solvency Ratio
Debt to equity1 2.74 2.99 3.02 2.73 2.66
Benchmarks
Debt to Equity, Competitors2
Accenture PLC 0.00 0.00 0.00 0.00 0.00
Adobe Inc. 0.28 0.31 0.39 0.44 0.22
Automatic Data Processing Inc. 0.53 0.35 0.42 0.58 0.50
Fidelity National Information Services Inc. 0.43 0.41 0.41 0.88 0.81
Intuit Inc. 0.21 0.66 0.12 0.19 0.36
Mastercard Inc. 1.90 1.98 1.45 1.17 0.99
Microsoft Corp. 0.50 0.62 0.77 0.97 1.23
Oracle Corp. 16.08 5.93 2.58 1.33 1.08
PayPal Holdings Inc. 0.42 0.45 0.29 0.13 0.06
salesforce.com inc. 0.07 0.09 0.22 0.21 0.32
ServiceNow Inc. 0.43 0.58 0.33 0.60 2.01
Visa Inc. 0.56 0.66 0.48 0.49 0.56
Debt to Equity, Sector
Software & Services 0.76 0.84 0.85 0.93 0.98
Debt to Equity, Industry
Information Technology 0.74 0.83 0.81 0.80 0.78

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 2021 Calculation
Debt to equity = Total debt ÷ Total IBM stockholders’ equity
= 51,704 ÷ 18,901 = 2.74

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. debt to equity ratio improved from 2019 to 2020 and from 2020 to 2021.

Debt to Equity (including Operating Lease Liability)

International Business Machines Corp., debt to equity (including operating lease liability) calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Selected Financial Data (US$ in millions)
Short-term debt 6,787  7,183  8,797  10,207  6,987 
Long-term debt, excluding current maturities 44,917  54,355  54,102  35,605  39,837 
Total debt 51,704  61,538  62,899  45,812  46,824 
Current operating lease liabilities 974  1,357  1,380  —  — 
Noncurrent operating lease liabilities 2,462  3,574  3,879  —  — 
Total debt (including operating lease liability) 55,140  66,469  68,158  45,812  46,824 
 
Total IBM stockholders’ equity 18,901  20,597  20,841  16,796  17,594 
Solvency Ratio
Debt to equity (including operating lease liability)1 2.92 3.23 3.27 2.73 2.66
Benchmarks
Debt to Equity (including Operating Lease Liability), Competitors2
Accenture PLC 0.18 0.21 0.00 0.00 0.00
Adobe Inc. 0.32 0.35 0.39 0.44 0.22
Automatic Data Processing Inc. 0.61 0.43 0.42 0.58 0.50
Fidelity National Information Services Inc. 0.44 0.42 0.42 0.88 0.81
Intuit Inc. 0.25 0.71 0.12 0.19 0.36
Mastercard Inc. 2.01 2.12 1.58 1.17 0.99
Microsoft Corp. 0.58 0.69 0.84 1.06 1.23
Oracle Corp. 16.61 6.10 2.58 1.33 1.08
PayPal Holdings Inc. 0.45 0.49 0.32 0.13 0.06
salesforce.com inc. 0.15 0.18 0.22 0.21 0.32
ServiceNow Inc. 0.60 0.75 0.53 0.60 2.01
Visa Inc. 0.57 0.68 0.48 0.49 0.56
Debt to Equity (including Operating Lease Liability), Sector
Software & Services 0.84 0.92 0.90 0.96 0.98
Debt to Equity (including Operating Lease Liability), Industry
Information Technology 0.80 0.90 0.84 0.81 0.78

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 2021 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total IBM stockholders’ equity
= 55,140 ÷ 18,901 = 2.92

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. debt to equity ratio (including operating lease liability) improved from 2019 to 2020 and from 2020 to 2021.

Debt to Capital

International Business Machines Corp., debt to capital calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Selected Financial Data (US$ in millions)
Short-term debt 6,787  7,183  8,797  10,207  6,987 
Long-term debt, excluding current maturities 44,917  54,355  54,102  35,605  39,837 
Total debt 51,704  61,538  62,899  45,812  46,824 
Total IBM stockholders’ equity 18,901  20,597  20,841  16,796  17,594 
Total capital 70,605  82,135  83,740  62,608  64,418 
Solvency Ratio
Debt to capital1 0.73 0.75 0.75 0.73 0.73
Benchmarks
Debt to Capital, Competitors2
Accenture PLC 0.00 0.00 0.00 0.00 0.00
Adobe Inc. 0.22 0.24 0.28 0.31 0.18
Automatic Data Processing Inc. 0.35 0.26 0.30 0.37 0.33
Fidelity National Information Services Inc. 0.30 0.29 0.29 0.47 0.45
Intuit Inc. 0.17 0.40 0.10 0.16 0.26
Mastercard Inc. 0.66 0.66 0.59 0.54 0.50
Microsoft Corp. 0.33 0.38 0.43 0.49 0.55
Oracle Corp. 0.94 0.86 0.72 0.57 0.52
PayPal Holdings Inc. 0.29 0.31 0.23 0.11 0.06
salesforce.com inc. 0.06 0.08 0.18 0.18 0.24
ServiceNow Inc. 0.30 0.37 0.25 0.37 0.67
Visa Inc. 0.36 0.40 0.33 0.33 0.36
Debt to Capital, Sector
Software & Services 0.43 0.46 0.46 0.48 0.50
Debt to Capital, Industry
Information Technology 0.43 0.45 0.45 0.44 0.44

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 2021 Calculation
Debt to capital = Total debt ÷ Total capital
= 51,704 ÷ 70,605 = 0.73

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. debt to capital ratio improved from 2019 to 2020 and from 2020 to 2021.

Debt to Capital (including Operating Lease Liability)

International Business Machines Corp., debt to capital (including operating lease liability) calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Selected Financial Data (US$ in millions)
Short-term debt 6,787  7,183  8,797  10,207  6,987 
Long-term debt, excluding current maturities 44,917  54,355  54,102  35,605  39,837 
Total debt 51,704  61,538  62,899  45,812  46,824 
Current operating lease liabilities 974  1,357  1,380  —  — 
Noncurrent operating lease liabilities 2,462  3,574  3,879  —  — 
Total debt (including operating lease liability) 55,140  66,469  68,158  45,812  46,824 
Total IBM stockholders’ equity 18,901  20,597  20,841  16,796  17,594 
Total capital (including operating lease liability) 74,041  87,066  88,999  62,608  64,418 
Solvency Ratio
Debt to capital (including operating lease liability)1 0.74 0.76 0.77 0.73 0.73
Benchmarks
Debt to Capital (including Operating Lease Liability), Competitors2
Accenture PLC 0.15 0.17 0.00 0.00 0.00
Adobe Inc. 0.24 0.26 0.28 0.31 0.18
Automatic Data Processing Inc. 0.38 0.30 0.30 0.37 0.33
Fidelity National Information Services Inc. 0.31 0.29 0.30 0.47 0.45
Intuit Inc. 0.20 0.42 0.10 0.16 0.26
Mastercard Inc. 0.67 0.68 0.61 0.54 0.50
Microsoft Corp. 0.37 0.41 0.46 0.51 0.55
Oracle Corp. 0.94 0.86 0.72 0.57 0.52
PayPal Holdings Inc. 0.31 0.33 0.24 0.11 0.06
salesforce.com inc. 0.13 0.16 0.18 0.18 0.24
ServiceNow Inc. 0.37 0.43 0.35 0.37 0.67
Visa Inc. 0.36 0.40 0.33 0.33 0.36
Debt to Capital (including Operating Lease Liability), Sector
Software & Services 0.46 0.48 0.47 0.49 0.50
Debt to Capital (including Operating Lease Liability), Industry
Information Technology 0.45 0.47 0.46 0.45 0.44

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 2021 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 55,140 ÷ 74,041 = 0.74

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. debt to capital ratio (including operating lease liability) improved from 2019 to 2020 and from 2020 to 2021.

Debt to Assets

International Business Machines Corp., debt to assets calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Selected Financial Data (US$ in millions)
Short-term debt 6,787  7,183  8,797  10,207  6,987 
Long-term debt, excluding current maturities 44,917  54,355  54,102  35,605  39,837 
Total debt 51,704  61,538  62,899  45,812  46,824 
 
Total assets 132,001  155,971  152,186  123,382  125,356 
Solvency Ratio
Debt to assets1 0.39 0.39 0.41 0.37 0.37
Benchmarks
Debt to Assets, Competitors2
Accenture PLC 0.00 0.00 0.00 0.00 0.00
Adobe Inc. 0.15 0.17 0.20 0.22 0.13
Automatic Data Processing Inc. 0.06 0.05 0.05 0.05 0.05
Fidelity National Information Services Inc. 0.25 0.24 0.24 0.38 0.36
Intuit Inc. 0.13 0.31 0.07 0.08 0.12
Mastercard Inc. 0.37 0.38 0.29 0.25 0.25
Microsoft Corp. 0.21 0.24 0.27 0.31 0.37
Oracle Corp. 0.64 0.62 0.52 0.44 0.43
PayPal Holdings Inc. 0.12 0.13 0.10 0.05 0.02
salesforce.com inc. 0.04 0.06 0.11 0.10 0.14
ServiceNow Inc. 0.15 0.19 0.12 0.17 0.35
Visa Inc. 0.25 0.30 0.23 0.24 0.27
Debt to Assets, Sector
Software & Services 0.26 0.28 0.28 0.29 0.31
Debt to Assets, Industry
Information Technology 0.27 0.29 0.29 0.29 0.30

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 2021 Calculation
Debt to assets = Total debt ÷ Total assets
= 51,704 ÷ 132,001 = 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. debt to assets ratio improved from 2019 to 2020 and from 2020 to 2021.

Debt to Assets (including Operating Lease Liability)

International Business Machines Corp., debt to assets (including operating lease liability) calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Selected Financial Data (US$ in millions)
Short-term debt 6,787  7,183  8,797  10,207  6,987 
Long-term debt, excluding current maturities 44,917  54,355  54,102  35,605  39,837 
Total debt 51,704  61,538  62,899  45,812  46,824 
Current operating lease liabilities 974  1,357  1,380  —  — 
Noncurrent operating lease liabilities 2,462  3,574  3,879  —  — 
Total debt (including operating lease liability) 55,140  66,469  68,158  45,812  46,824 
 
Total assets 132,001  155,971  152,186  123,382  125,356 
Solvency Ratio
Debt to assets (including operating lease liability)1 0.42 0.43 0.45 0.37 0.37
Benchmarks
Debt to Assets (including Operating Lease Liability), Competitors2
Accenture PLC 0.08 0.09 0.00 0.00 0.00
Adobe Inc. 0.17 0.19 0.20 0.22 0.13
Automatic Data Processing Inc. 0.07 0.06 0.05 0.05 0.05
Fidelity National Information Services Inc. 0.25 0.25 0.25 0.38 0.36
Intuit Inc. 0.16 0.33 0.07 0.08 0.12
Mastercard Inc. 0.39 0.40 0.32 0.25 0.25
Microsoft Corp. 0.25 0.27 0.30 0.34 0.37
Oracle Corp. 0.66 0.64 0.52 0.44 0.43
PayPal Holdings Inc. 0.13 0.14 0.11 0.05 0.02
salesforce.com inc. 0.10 0.11 0.11 0.10 0.14
ServiceNow Inc. 0.21 0.24 0.19 0.17 0.35
Visa Inc. 0.26 0.30 0.23 0.24 0.27
Debt to Assets (including Operating Lease Liability), Sector
Software & Services 0.29 0.31 0.30 0.30 0.31
Debt to Assets (including Operating Lease Liability), Industry
Information Technology 0.29 0.31 0.30 0.29 0.30

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 2021 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 55,140 ÷ 132,001 = 0.42

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. debt to assets ratio (including operating lease liability) improved from 2019 to 2020 and from 2020 to 2021.

Financial Leverage

International Business Machines Corp., financial leverage calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Selected Financial Data (US$ in millions)
Total assets 132,001  155,971  152,186  123,382  125,356 
Total IBM stockholders’ equity 18,901  20,597  20,841  16,796  17,594 
Solvency Ratio
Financial leverage1 6.98 7.57 7.30 7.35 7.12
Benchmarks
Financial Leverage, Competitors2
Accenture PLC 2.21 2.18 2.07 2.36 2.54
Adobe Inc. 1.84 1.83 1.97 2.00 1.72
Automatic Data Processing Inc. 8.60 6.81 7.76 10.72 9.35
Fidelity National Information Services Inc. 1.75 1.70 1.70 2.33 2.26
Intuit Inc. 1.57 2.14 1.68 2.20 3.00
Mastercard Inc. 5.15 5.25 4.96 4.61 3.90
Microsoft Corp. 2.35 2.55 2.80 3.13 3.33
Oracle Corp. 25.03 9.56 4.99 3.00 2.51
PayPal Holdings Inc. 3.49 3.52 3.04 2.82 2.55
salesforce.com inc. 1.60 1.63 1.97 2.24 2.34
ServiceNow Inc. 2.92 3.07 2.83 3.49 5.82
Visa Inc. 2.21 2.23 2.09 2.04 2.08
Financial Leverage, Sector
Software & Services 2.90 2.98 3.03 3.21 3.15
Financial Leverage, Industry
Information Technology 2.73 2.86 2.81 2.80 2.61

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 2021 Calculation
Financial leverage = Total assets ÷ Total IBM stockholders’ equity
= 132,001 ÷ 18,901 = 6.98

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. financial leverage ratio increased from 2019 to 2020 but then decreased significantly from 2020 to 2021.

Interest Coverage

International Business Machines Corp., interest coverage calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Selected Financial Data (US$ in millions)
Net income attributable to IBM 5,743  5,590  9,431  8,728  5,753 
Add: Net income attributable to noncontrolling interest 19  22  25  17  17 
Less: Income (loss) from discontinued operations, net of tax 1,031  89  (4) (5)
Add: Income tax expense 125  (864) 731  2,619  5,642 
Add: Interest expense 1,155  1,288  1,344  723  615 
Earnings before interest and tax (EBIT) 6,011  5,947  11,535  12,082  12,032 
Solvency Ratio
Interest coverage1 5.20 4.62 8.58 16.71 19.56
Benchmarks
Interest Coverage, Competitors2
Accenture PLC 131.46 205.84 273.26 298.26 297.95
Adobe Inc. 51.49 37.00 21.38 32.31 29.73
Automatic Data Processing Inc. 57.30 30.72 24.14 22.14 32.64
Fidelity National Information Services Inc. 4.68 1.77 2.04 4.47 3.88
Intuit Inc. 89.14 158.00 126.40 76.15 45.10
Mastercard Inc. 24.91 21.42 44.44 39.73 43.35
Microsoft Corp. 31.31 21.47 17.27 14.35 11.42
Oracle Corp. 6.28 7.13 6.97 7.43 7.47
PayPal Holdings Inc. 18.67 25.23 27.07 31.86 315.29
salesforce.com inc. 21.33 6.39 7.38 3.32 1.29
ServiceNow Inc. 9.89 5.56 3.02 0.26 -1.79
Visa Inc. 32.31 27.72 28.92 21.92 21.77
Interest Coverage, Sector
Software & Services 19.27 15.70 14.91 14.74 13.90
Interest Coverage, Industry
Information Technology 23.43 17.30 16.59 18.11 17.25

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 2021 Calculation
Interest coverage = EBIT ÷ Interest expense
= 6,011 ÷ 1,155 = 5.20

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. interest coverage ratio deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021.

Fixed Charge Coverage

International Business Machines Corp., fixed charge coverage calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Selected Financial Data (US$ in millions)
Net income attributable to IBM 5,743  5,590  9,431  8,728  5,753 
Add: Net income attributable to noncontrolling interest 19  22  25  17  17 
Less: Income (loss) from discontinued operations, net of tax 1,031  89  (4) (5)
Add: Income tax expense 125  (864) 731  2,619  5,642 
Add: Interest expense 1,155  1,288  1,344  723  615 
Earnings before interest and tax (EBIT) 6,011  5,947  11,535  12,082  12,032 
Add: Operating lease cost 1,126  1,581  1,645  1,944  1,821 
Earnings before fixed charges and tax 7,137  7,528  13,180  14,026  13,853 
 
Interest expense 1,155  1,288  1,344  723  615 
Operating lease cost 1,126  1,581  1,645  1,944  1,821 
Fixed charges 2,281  2,869  2,989  2,667  2,436 
Solvency Ratio
Fixed charge coverage1 3.13 2.62 4.41 5.26 5.69
Benchmarks
Fixed Charge Coverage, Competitors2
Accenture PLC 10.41 9.66 10.07 9.63 8.30
Adobe Inc. 25.59 18.77 10.78 13.34 12.26
Automatic Data Processing Inc. 15.85 12.22 8.51 7.43 9.05
Fidelity National Information Services Inc. 3.12 1.47 1.75 3.36 3.10
Intuit Inc. 25.58 27.48 34.00 26.91 22.03
Mastercard Inc. 19.64 16.43 31.13 25.01 26.78
Microsoft Corp. 16.90 12.44 10.94 9.45 7.57
Oracle Corp. 5.17 5.68 5.50 6.38 6.39
PayPal Holdings Inc. 11.20 14.51 12.94 14.89 29.95
salesforce.com inc. 2.92 1.68 2.89 1.54 1.08
ServiceNow Inc. 2.95 2.29 1.69 0.61 -0.55
Visa Inc. 26.74 22.89 19.17 16.32 17.20
Fixed Charge Coverage, Sector
Software & Services 10.69 8.75 8.75 8.48 7.93
Fixed Charge Coverage, Industry
Information Technology 13.91 10.65 10.90 11.70 10.99

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 2021 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 7,137 ÷ 2,281 = 3.13

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. fixed charge coverage ratio deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021.