Analysis of Solvency Ratios
Beginner level
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: 2020-02-25), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-28), 10-K (filing date: 2016-02-23).
| 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 2017 to 2018 and from 2018 to 2019. |
| 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 2017 to 2018 and from 2018 to 2019. |
| 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 2017 to 2018 and from 2018 to 2019. |
| 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 2017 to 2018 and from 2018 to 2019. |
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | International Business Machines Corp.’s debt to assets ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
| 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) improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | International Business Machines Corp.’s financial leverage ratio increased from 2017 to 2018 but then slightly decreased from 2018 to 2019. |
| 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 2017 to 2018 and from 2018 to 2019. |
| 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 2017 to 2018 and from 2018 to 2019. |
Debt to Equity
International Business Machines Corp., debt to equity calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 8,797 | 10,207 | 6,987 | 7,513 | 6,461 | |
| Long-term debt, excluding current maturities | 54,102 | 35,605 | 39,837 | 34,655 | 33,428 | |
| Total debt | 62,899 | 45,812 | 46,824 | 42,168 | 39,889 | |
| Total IBM stockholders’ equity | 20,841 | 16,796 | 17,594 | 18,246 | 14,262 | |
| Solvency Ratio | ||||||
| Debt to equity1 | 3.02 | 2.73 | 2.66 | 2.31 | 2.80 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Adobe Inc. | 0.39 | 0.44 | 0.22 | 0.26 | 0.27 | |
| Alphabet Inc. | 0.02 | 0.02 | 0.03 | 0.03 | 0.04 | |
| Autodesk Inc. | — | — | 2.03 | 0.92 | 0.34 | |
| Facebook Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Intuit Inc. | 0.12 | 0.19 | 0.36 | 0.86 | 0.21 | |
| Microsoft Corp. | 0.71 | 0.92 | 1.19 | 0.75 | 0.44 | |
| Oracle Corp. | 2.58 | 1.33 | 1.08 | 0.93 | 0.86 | |
| salesforce.com inc. | 0.20 | 0.18 | 0.27 | 0.26 | 0.34 | |
| ServiceNow Inc. | 0.33 | 0.60 | 2.01 | 1.31 | 0.84 | |
| Debt to Equity, Sector | ||||||
| Software & Computer Services | 0.43 | 0.46 | 0.52 | 0.43 | 0.39 | |
| Debt to Equity, Industry | ||||||
| Technology | 0.57 | 0.56 | 0.58 | 0.49 | 0.43 | |
Based on: 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), 10-K (filing date: 2016-02-23).
1 2019 Calculation
Debt to equity = Total debt ÷ Total IBM stockholders’ equity
= 62,899 ÷ 20,841 = 3.02
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 2017 to 2018 and from 2018 to 2019. |
Debt to Equity (including Operating Lease Liability)
International Business Machines Corp., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 8,797 | 10,207 | 6,987 | 7,513 | 6,461 | |
| Long-term debt, excluding current maturities | 54,102 | 35,605 | 39,837 | 34,655 | 33,428 | |
| Total debt | 62,899 | 45,812 | 46,824 | 42,168 | 39,889 | |
| Current operating lease liabilities | 1,380 | — | — | — | — | |
| Noncurrent operating lease liabilities | 3,879 | — | — | — | — | |
| Total debt (including operating lease liability) | 68,158 | 45,812 | 46,824 | 42,168 | 39,889 | |
| Total IBM stockholders’ equity | 20,841 | 16,796 | 17,594 | 18,246 | 14,262 | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 3.27 | 2.73 | 2.66 | 2.31 | 2.80 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Alphabet Inc. | 0.08 | 0.02 | 0.03 | 0.03 | 0.04 | |
| Autodesk Inc. | — | — | 2.03 | 0.92 | 0.34 | |
| Facebook Inc. | 0.11 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Microsoft Corp. | 0.78 | 1.01 | 1.19 | 0.75 | 0.44 | |
| Oracle Corp. | 2.58 | 1.33 | 1.08 | 0.93 | 0.86 | |
| salesforce.com inc. | 0.20 | 0.18 | 0.27 | 0.26 | 0.34 | |
| ServiceNow Inc. | 0.53 | 0.60 | 2.01 | 1.31 | 0.84 | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Software & Computer Services | 0.50 | 0.47 | 0.52 | 0.43 | 0.39 | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Technology | 0.61 | 0.57 | 0.58 | 0.49 | 0.43 | |
Based on: 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), 10-K (filing date: 2016-02-23).
1 2019 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total IBM stockholders’ equity
= 68,158 ÷ 20,841 = 3.27
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 2017 to 2018 and from 2018 to 2019. |
Debt to Capital
International Business Machines Corp., debt to capital calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 8,797 | 10,207 | 6,987 | 7,513 | 6,461 | |
| Long-term debt, excluding current maturities | 54,102 | 35,605 | 39,837 | 34,655 | 33,428 | |
| Total debt | 62,899 | 45,812 | 46,824 | 42,168 | 39,889 | |
| Total IBM stockholders’ equity | 20,841 | 16,796 | 17,594 | 18,246 | 14,262 | |
| Total capital | 83,740 | 62,608 | 64,418 | 60,414 | 54,151 | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.75 | 0.73 | 0.73 | 0.70 | 0.74 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Adobe Inc. | 0.28 | 0.31 | 0.18 | 0.20 | 0.21 | |
| Alphabet Inc. | 0.02 | 0.02 | 0.03 | 0.03 | 0.04 | |
| Autodesk Inc. | 1.11 | 1.19 | 0.67 | 0.48 | 0.25 | |
| Facebook Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Intuit Inc. | 0.10 | 0.16 | 0.26 | 0.46 | 0.18 | |
| Microsoft Corp. | 0.41 | 0.48 | 0.54 | 0.43 | 0.31 | |
| Oracle Corp. | 0.72 | 0.57 | 0.52 | 0.48 | 0.46 | |
| salesforce.com inc. | 0.17 | 0.15 | 0.21 | 0.21 | 0.26 | |
| ServiceNow Inc. | 0.25 | 0.37 | 0.67 | 0.57 | 0.46 | |
| Debt to Capital, Sector | ||||||
| Software & Computer Services | 0.30 | 0.31 | 0.34 | 0.30 | 0.28 | |
| Debt to Capital, Industry | ||||||
| Technology | 0.36 | 0.36 | 0.37 | 0.33 | 0.30 | |
Based on: 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), 10-K (filing date: 2016-02-23).
1 2019 Calculation
Debt to capital = Total debt ÷ Total capital
= 62,899 ÷ 83,740 = 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 2017 to 2018 and from 2018 to 2019. |
Debt to Capital (including Operating Lease Liability)
International Business Machines Corp., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 8,797 | 10,207 | 6,987 | 7,513 | 6,461 | |
| Long-term debt, excluding current maturities | 54,102 | 35,605 | 39,837 | 34,655 | 33,428 | |
| Total debt | 62,899 | 45,812 | 46,824 | 42,168 | 39,889 | |
| Current operating lease liabilities | 1,380 | — | — | — | — | |
| Noncurrent operating lease liabilities | 3,879 | — | — | — | — | |
| Total debt (including operating lease liability) | 68,158 | 45,812 | 46,824 | 42,168 | 39,889 | |
| Total IBM stockholders’ equity | 20,841 | 16,796 | 17,594 | 18,246 | 14,262 | |
| Total capital (including operating lease liability) | 88,999 | 62,608 | 64,418 | 60,414 | 54,151 | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.77 | 0.73 | 0.73 | 0.70 | 0.74 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Alphabet Inc. | 0.07 | 0.02 | 0.03 | 0.03 | 0.04 | |
| Autodesk Inc. | 1.11 | 1.19 | 0.67 | 0.48 | 0.25 | |
| Facebook Inc. | 0.10 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Microsoft Corp. | 0.44 | 0.50 | 0.54 | 0.43 | 0.31 | |
| Oracle Corp. | 0.72 | 0.57 | 0.52 | 0.48 | 0.46 | |
| salesforce.com inc. | 0.17 | 0.15 | 0.21 | 0.21 | 0.26 | |
| ServiceNow Inc. | 0.35 | 0.37 | 0.67 | 0.57 | 0.46 | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Software & Computer Services | 0.34 | 0.32 | 0.34 | 0.30 | 0.28 | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Technology | 0.38 | 0.36 | 0.37 | 0.33 | 0.30 | |
Based on: 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), 10-K (filing date: 2016-02-23).
1 2019 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 68,158 ÷ 88,999 = 0.77
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 2017 to 2018 and from 2018 to 2019. |
Debt to Assets
International Business Machines Corp., debt to assets calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 8,797 | 10,207 | 6,987 | 7,513 | 6,461 | |
| Long-term debt, excluding current maturities | 54,102 | 35,605 | 39,837 | 34,655 | 33,428 | |
| Total debt | 62,899 | 45,812 | 46,824 | 42,168 | 39,889 | |
| Total assets | 152,186 | 123,382 | 125,356 | 117,470 | 110,495 | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.41 | 0.37 | 0.37 | 0.36 | 0.36 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Adobe Inc. | 0.20 | 0.22 | 0.13 | 0.15 | 0.16 | |
| Alphabet Inc. | 0.02 | 0.02 | 0.02 | 0.02 | 0.04 | |
| Autodesk Inc. | 0.44 | 0.39 | 0.31 | 0.27 | 0.15 | |
| Facebook Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Intuit Inc. | 0.07 | 0.08 | 0.12 | 0.24 | 0.10 | |
| Microsoft Corp. | 0.25 | 0.29 | 0.36 | 0.28 | 0.20 | |
| Oracle Corp. | 0.52 | 0.44 | 0.43 | 0.39 | 0.38 | |
| salesforce.com inc. | 0.10 | 0.08 | 0.11 | 0.10 | 0.13 | |
| ServiceNow Inc. | 0.12 | 0.17 | 0.35 | 0.25 | 0.26 | |
| Debt to Assets, Sector | ||||||
| Software & Computer Services | 0.20 | 0.22 | 0.24 | 0.22 | 0.20 | |
| Debt to Assets, Industry | ||||||
| Technology | 0.24 | 0.25 | 0.27 | 0.24 | 0.22 | |
Based on: 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), 10-K (filing date: 2016-02-23).
1 2019 Calculation
Debt to assets = Total debt ÷ Total assets
= 62,899 ÷ 152,186 = 0.41
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 improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
Debt to Assets (including Operating Lease Liability)
International Business Machines Corp., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt | 8,797 | 10,207 | 6,987 | 7,513 | 6,461 | |
| Long-term debt, excluding current maturities | 54,102 | 35,605 | 39,837 | 34,655 | 33,428 | |
| Total debt | 62,899 | 45,812 | 46,824 | 42,168 | 39,889 | |
| Current operating lease liabilities | 1,380 | — | — | — | — | |
| Noncurrent operating lease liabilities | 3,879 | — | — | — | — | |
| Total debt (including operating lease liability) | 68,158 | 45,812 | 46,824 | 42,168 | 39,889 | |
| Total assets | 152,186 | 123,382 | 125,356 | 117,470 | 110,495 | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.45 | 0.37 | 0.37 | 0.36 | 0.36 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Alphabet Inc. | 0.06 | 0.02 | 0.02 | 0.02 | 0.04 | |
| Autodesk Inc. | 0.44 | 0.39 | 0.31 | 0.27 | 0.15 | |
| Facebook Inc. | 0.08 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Microsoft Corp. | 0.28 | 0.32 | 0.36 | 0.28 | 0.20 | |
| Oracle Corp. | 0.52 | 0.44 | 0.43 | 0.39 | 0.38 | |
| salesforce.com inc. | 0.10 | 0.08 | 0.11 | 0.10 | 0.13 | |
| ServiceNow Inc. | 0.19 | 0.17 | 0.35 | 0.25 | 0.26 | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Software & Computer Services | 0.24 | 0.22 | 0.24 | 0.22 | 0.20 | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Technology | 0.26 | 0.25 | 0.27 | 0.24 | 0.22 | |
Based on: 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), 10-K (filing date: 2016-02-23).
1 2019 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 68,158 ÷ 152,186 = 0.45
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) improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
Financial Leverage
International Business Machines Corp., financial leverage calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 152,186 | 123,382 | 125,356 | 117,470 | 110,495 | |
| Total IBM stockholders’ equity | 20,841 | 16,796 | 17,594 | 18,246 | 14,262 | |
| Solvency Ratio | ||||||
| Financial leverage1 | 7.30 | 7.35 | 7.12 | 6.44 | 7.75 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Adobe Inc. | 1.97 | 2.00 | 1.72 | 1.71 | 1.67 | |
| Alphabet Inc. | 1.37 | 1.31 | 1.29 | 1.20 | 1.23 | |
| Autodesk Inc. | — | — | 6.54 | 3.41 | 2.21 | |
| Facebook Inc. | 1.32 | 1.16 | 1.14 | 1.10 | 1.12 | |
| Intuit Inc. | 1.68 | 2.20 | 3.00 | 3.66 | 2.13 | |
| Microsoft Corp. | 2.80 | 3.13 | 3.33 | 2.69 | 2.20 | |
| Oracle Corp. | 4.99 | 3.00 | 2.51 | 2.37 | 2.28 | |
| salesforce.com inc. | 1.97 | 2.24 | 2.34 | 2.55 | 2.69 | |
| ServiceNow Inc. | 2.83 | 3.49 | 5.82 | 5.26 | 3.19 | |
| Financial Leverage, Sector | ||||||
| Software & Computer Services | 2.14 | 2.10 | 2.13 | 1.97 | 1.94 | |
| Financial Leverage, Industry | ||||||
| Technology | 2.33 | 2.27 | 2.20 | 2.05 | 1.99 | |
Based on: 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), 10-K (filing date: 2016-02-23).
1 2019 Calculation
Financial leverage = Total assets ÷ Total IBM stockholders’ equity
= 152,186 ÷ 20,841 = 7.30
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 increased from 2017 to 2018 but then slightly decreased from 2018 to 2019. |
Interest Coverage
International Business Machines Corp., interest coverage calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to IBM | 9,431 | 8,728 | 5,753 | 11,872 | 13,190 | |
| Add: Net income attributable to noncontrolling interest | 25 | 17 | 17 | 16 | 8 | |
| Less: Income (loss) from discontinued operations, net of tax | (4) | 5 | (5) | (9) | (174) | |
| Add: Income tax expense | 731 | 2,619 | 5,642 | 449 | 2,581 | |
| Add: Interest expense | 1,344 | 723 | 615 | 630 | 468 | |
| Earnings before interest and tax (EBIT) | 11,535 | 12,082 | 12,032 | 12,976 | 16,421 | |
| Solvency Ratio | ||||||
| Interest coverage1 | 8.58 | 16.71 | 19.56 | 20.60 | 35.09 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Adobe Inc. | 21.38 | 32.31 | 29.73 | 21.37 | 14.61 | |
| Alphabet Inc. | 397.25 | 307.25 | 250.48 | 195.76 | 189.95 | |
| Autodesk Inc. | 0.18 | -15.15 | -16.64 | 0.40 | 7.29 | |
| Facebook Inc. | 1,241.60 | 2,818.89 | 3,433.33 | 1,252.80 | 270.30 | |
| Intuit Inc. | 126.40 | 76.15 | 45.10 | 35.37 | 27.37 | |
| Microsoft Corp. | 17.27 | 14.35 | 11.42 | 16.89 | 24.70 | |
| Oracle Corp. | 6.97 | 7.43 | 7.47 | 8.88 | 12.33 | |
| salesforce.com inc. | 7.38 | 3.32 | 1.29 | 1.89 | -1.91 | |
| ServiceNow Inc. | 3.02 | 0.26 | -1.79 | -12.52 | -5.21 | |
| Interest Coverage, Sector | ||||||
| Software & Computer Services | 21.60 | 22.24 | 20.26 | 23.20 | 28.32 | |
| Interest Coverage, Industry | ||||||
| Technology | 19.95 | 22.04 | 20.77 | 22.64 | 35.55 | |
Based on: 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), 10-K (filing date: 2016-02-23).
1 2019 Calculation
Interest coverage = EBIT ÷ Interest expense
= 11,535 ÷ 1,344 = 8.58
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 2017 to 2018 and from 2018 to 2019. |
Fixed Charge Coverage
International Business Machines Corp., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to IBM | 9,431 | 8,728 | 5,753 | 11,872 | 13,190 | |
| Add: Net income attributable to noncontrolling interest | 25 | 17 | 17 | 16 | 8 | |
| Less: Income (loss) from discontinued operations, net of tax | (4) | 5 | (5) | (9) | (174) | |
| Add: Income tax expense | 731 | 2,619 | 5,642 | 449 | 2,581 | |
| Add: Interest expense | 1,344 | 723 | 615 | 630 | 468 | |
| Earnings before interest and tax (EBIT) | 11,535 | 12,082 | 12,032 | 12,976 | 16,421 | |
| Add: Operating lease cost | 1,645 | 1,944 | 1,821 | 1,508 | 1,474 | |
| Earnings before fixed charges and tax | 13,180 | 14,026 | 13,853 | 14,484 | 17,895 | |
| Interest expense | 1,344 | 723 | 615 | 630 | 468 | |
| Operating lease cost | 1,645 | 1,944 | 1,821 | 1,508 | 1,474 | |
| Fixed charges | 2,989 | 2,667 | 2,436 | 2,138 | 1,942 | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 4.41 | 5.26 | 5.69 | 6.77 | 9.21 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Adobe Inc. | 10.78 | 13.34 | 12.26 | 9.79 | 6.56 | |
| Alphabet Inc. | 17.10 | 25.69 | 23.49 | 24.65 | 12.49 | |
| Autodesk Inc. | 0.62 | -5.16 | -4.51 | 0.78 | 2.22 | |
| Facebook Inc. | 22.41 | 40.75 | 56.81 | 45.87 | 31.36 | |
| Intuit Inc. | 34.00 | 26.91 | 22.03 | 17.94 | 9.28 | |
| Microsoft Corp. | 10.94 | 9.45 | 7.57 | 9.81 | 11.46 | |
| Oracle Corp. | 5.50 | 6.38 | 6.39 | 7.44 | 9.76 | |
| salesforce.com inc. | 2.89 | 1.54 | 1.08 | 1.26 | 0.10 | |
| ServiceNow Inc. | 1.69 | 0.61 | -0.55 | -5.67 | -2.64 | |
| Fixed Charge Coverage, Sector | ||||||
| Software & Computer Services | 10.20 | 11.16 | 10.26 | 11.17 | 10.86 | |
| Fixed Charge Coverage, Industry | ||||||
| Technology | 11.76 | 13.40 | 12.53 | 13.15 | 16.56 | |
Based on: 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), 10-K (filing date: 2016-02-23).
1 2019 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 13,180 ÷ 2,989 = 4.41
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 2017 to 2018 and from 2018 to 2019. |