Stock Analysis on Net

International Business Machines Corp. (NYSE:IBM)

Analysis of Profitability Ratios 

Microsoft Excel LibreOffice Calc

Profitability Ratios (Summary)

International Business Machines Corp., profitability ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Return on Sales
Gross profit margin 54.90% 48.32% 47.30% 46.41% 45.78%
Operating profit margin 11.97% 9.22% 13.67% 16.61% 14.91%
Net profit margin 10.01% 7.59% 12.22% 10.97% 7.27%
Return on Investment
Return on equity (ROE) 30.38% 27.14% 45.25% 51.96% 32.70%
Return on assets (ROA) 4.35% 3.58% 6.20% 7.07% 4.59%

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).

Profitability ratio Description The company
Gross profit margin Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. International Business Machines Corp. gross profit margin ratio improved from 2019 to 2020 and from 2020 to 2021.
Operating profit margin A profitability ratio calculated as operating income divided by revenue. International Business Machines Corp. operating profit margin ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.
Net profit margin An indicator of profitability, calculated as net income divided by revenue. International Business Machines Corp. net profit margin ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.

Profitability ratio Description The company
ROE A profitability ratio calculated as net income divided by shareholders’ equity. International Business Machines Corp. ROE deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021.
ROA A profitability ratio calculated as net income divided by total assets. International Business Machines Corp. ROA deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021.

Gross Profit Margin

International Business Machines Corp., gross profit margin 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)
Gross profit 31,486  35,575  36,488  36,936  36,227 
Revenue 57,350  73,620  77,147  79,591  79,139 
Profitability Ratio
Gross profit margin1 54.90% 48.32% 47.30% 46.41% 45.78%
Benchmarks
Gross Profit Margin, Competitors2
Accenture PLC 32.38% 31.53% 30.81% 29.91% 30.00%
Adobe Inc. 88.18% 86.62% 85.03% 86.77% 86.16%
Automatic Data Processing Inc. 42.42% 42.12% 42.95% 41.15% 41.28%
Fidelity National Information Services Inc. 37.44% 33.49% 36.03% 33.88% 32.25%
Intuit Inc. 82.53% 82.05% 82.80% 83.62% 84.37%
Microsoft Corp. 68.93% 67.78% 65.90% 65.25% 61.91%
Oracle Corp. 80.59% 79.68% 79.76% 79.71% 80.20%
PayPal Holdings Inc. 46.99% 46.62% 44.94% 46.53% 48.87%
salesforce.com inc. 74.41% 75.23% 74.02% 73.54% 73.38%
ServiceNow Inc. 77.05% 78.16% 76.98% 76.13% 74.15%

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
Gross profit margin = 100 × Gross profit ÷ Revenue
= 100 × 31,486 ÷ 57,350 = 54.90%

2 Click competitor name to see calculations.

Profitability ratio Description The company
Gross profit margin Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. International Business Machines Corp. gross profit margin ratio improved from 2019 to 2020 and from 2020 to 2021.

Operating Profit Margin

International Business Machines Corp., operating profit margin 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)
Operating income 6,865  6,786  10,543  13,217  11,799 
Revenue 57,350  73,620  77,147  79,591  79,139 
Profitability Ratio
Operating profit margin1 11.97% 9.22% 13.67% 16.61% 14.91%
Benchmarks
Operating Profit Margin, Competitors2
Accenture PLC 15.08% 14.69% 14.59% 14.04% 12.60%
Adobe Inc. 36.76% 32.93% 29.25% 31.45% 29.69%
Automatic Data Processing Inc. 22.16% 21.53% 21.34% 18.85% 18.80%
Fidelity National Information Services Inc. 7.60% 4.40% 9.38% 17.31% 16.35%
Intuit Inc. 25.95% 28.34% 27.33% 25.10% 26.95%
Mastercard Inc. 53.39% 52.81% 57.24% 48.71% 52.99%
Microsoft Corp. 41.59% 37.03% 34.14% 31.77% 24.82%
Oracle Corp. 37.58% 35.57% 34.26% 34.34% 33.69%
PayPal Holdings Inc. 16.80% 15.33% 15.30% 14.20% 16.24%
salesforce.com inc. 2.14% 1.74% 4.03% 2.25% 0.77%
ServiceNow Inc. 4.36% 4.40% 1.22% -1.63% -5.25%
Visa Inc. 65.56% 64.46% 65.29% 62.86% 66.15%
Operating Profit Margin, Sector
Software & Services 30.70% 27.16% 27.43% 26.52% 24.02%
Operating Profit Margin, Industry
Information Technology 29.60% 26.04% 26.82% 27.42% 25.02%

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
Operating profit margin = 100 × Operating income ÷ Revenue
= 100 × 6,865 ÷ 57,350 = 11.97%

2 Click competitor name to see calculations.

Profitability ratio Description The company
Operating profit margin A profitability ratio calculated as operating income divided by revenue. International Business Machines Corp. operating profit margin ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.

Net Profit Margin

International Business Machines Corp., net profit margin 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 
Revenue 57,350  73,620  77,147  79,591  79,139 
Profitability Ratio
Net profit margin1 10.01% 7.59% 12.22% 10.97% 7.27%
Benchmarks
Net Profit Margin, Competitors2
Accenture PLC 11.69% 11.52% 11.06% 9.76% 9.37%
Adobe Inc. 30.55% 40.88% 26.42% 28.69% 23.20%
Automatic Data Processing Inc. 17.32% 16.91% 16.17% 12.16% 14.00%
Fidelity National Information Services Inc. 3.00% 1.26% 2.88% 10.04% 14.46%
Intuit Inc. 21.41% 23.78% 22.95% 20.31% 18.76%
Mastercard Inc. 46.00% 41.90% 48.08% 39.19% 31.33%
Microsoft Corp. 36.45% 30.96% 31.18% 15.02% 23.57%
Oracle Corp. 33.96% 25.94% 28.05% 9.60% 24.74%
PayPal Holdings Inc. 16.43% 19.59% 13.84% 13.31% 13.71%
salesforce.com inc. 19.16% 0.74% 8.36% 1.22% 2.14%
ServiceNow Inc. 3.90% 2.62% 18.11% -1.02% -7.71%
Visa Inc. 51.07% 49.74% 52.57% 49.98% 36.49%
Net Profit Margin, Sector
Software & Services 27.03% 22.56% 23.85% 15.52% 17.45%
Net Profit Margin, Industry
Information Technology 26.11% 22.23% 23.17% 19.61% 18.55%

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
Net profit margin = 100 × Net income attributable to IBM ÷ Revenue
= 100 × 5,743 ÷ 57,350 = 10.01%

2 Click competitor name to see calculations.

Profitability ratio Description The company
Net profit margin An indicator of profitability, calculated as net income divided by revenue. International Business Machines Corp. net profit margin ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.

Return on Equity (ROE)

International Business Machines Corp., ROE 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 
Total IBM stockholders’ equity 18,901  20,597  20,841  16,796  17,594 
Profitability Ratio
ROE1 30.38% 27.14% 45.25% 51.96% 32.70%
Benchmarks
ROE, Competitors2
Accenture PLC 30.25% 30.05% 33.17% 39.17% 38.50%
Adobe Inc. 32.59% 39.66% 28.03% 27.67% 20.02%
Automatic Data Processing Inc. 45.83% 42.88% 42.46% 46.85% 43.59%
Fidelity National Information Services Inc. 0.88% 0.32% 0.60% 8.28% 12.17%
Intuit Inc. 20.89% 35.76% 41.53% 51.44% 71.71%
Mastercard Inc. 118.80% 100.31% 137.76% 108.60% 71.60%
Microsoft Corp. 43.15% 37.43% 38.35% 20.03% 29.29%
Oracle Corp. 262.43% 83.94% 50.87% 8.37% 17.33%
PayPal Holdings Inc. 19.19% 20.99% 14.56% 13.37% 11.22%
salesforce.com inc. 9.81% 0.37% 7.11% 1.36% 2.40%
ServiceNow Inc. 6.22% 4.18% 29.45% -2.40% -25.53%
Visa Inc. 32.75% 30.01% 34.83% 30.29% 20.45%
ROE, Sector
Software & Services 33.60% 28.33% 31.62% 23.46% 24.15%
ROE, Industry
Information Technology 40.02% 33.11% 34.56% 30.73% 23.48%

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
ROE = 100 × Net income attributable to IBM ÷ Total IBM stockholders’ equity
= 100 × 5,743 ÷ 18,901 = 30.38%

2 Click competitor name to see calculations.

Profitability ratio Description The company
ROE A profitability ratio calculated as net income divided by shareholders’ equity. International Business Machines Corp. ROE deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021.

Return on Assets (ROA)

International Business Machines Corp., ROA 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 
Total assets 132,001  155,971  152,186  123,382  125,356 
Profitability Ratio
ROA1 4.35% 3.58% 6.20% 7.07% 4.59%
Benchmarks
ROA, Competitors2
Accenture PLC 13.68% 13.78% 16.04% 16.61% 15.18%
Adobe Inc. 17.70% 21.66% 14.22% 13.80% 11.65%
Automatic Data Processing Inc. 5.33% 6.30% 5.47% 4.37% 4.66%
Fidelity National Information Services Inc. 0.50% 0.19% 0.36% 3.56% 5.38%
Intuit Inc. 13.29% 16.70% 24.78% 23.39% 23.87%
Mastercard Inc. 23.06% 19.09% 27.77% 23.57% 18.36%
Microsoft Corp. 18.36% 14.70% 13.69% 6.40% 8.80%
Oracle Corp. 10.48% 8.78% 10.20% 2.79% 6.92%
PayPal Holdings Inc. 5.50% 5.97% 4.79% 4.75% 4.40%
salesforce.com inc. 6.14% 0.23% 3.61% 0.61% 1.02%
ServiceNow Inc. 2.13% 1.36% 10.41% -0.69% -4.39%
Visa Inc. 14.85% 13.43% 16.65% 14.88% 9.85%
ROA, Sector
Software & Services 11.58% 9.50% 10.44% 7.30% 7.66%
ROA, Industry
Information Technology 14.67% 11.57% 12.31% 10.99% 8.99%

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
ROA = 100 × Net income attributable to IBM ÷ Total assets
= 100 × 5,743 ÷ 132,001 = 4.35%

2 Click competitor name to see calculations.

Profitability ratio Description The company
ROA A profitability ratio calculated as net income divided by total assets. International Business Machines Corp. ROA deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021.