Profitability Analysis
Quarterly Data

Difficulty: Beginner


Ratios (Summary)

International Business Machines Corp., profitability ratios (quarterly data)

Microsoft Excel LibreOffice Calc
Jun 30, 2018 Mar 31, 2018 Dec 31, 2017 Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Sep 30, 2014 Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Mar 31, 2013
Return on Sales
Gross profit margin 45.94% 45.85% 45.78% 46.27% 46.50% 47.08% 47.92% 48.38% 48.88% 49.38% 49.77% 50.29% 50.14% 50.18% 50.01% 49.66% 49.50% 49.15% 48.63% % % %
Operating profit margin 15.72% 14.97% 14.91% 15.53% 15.89% 16.63% 16.40% 16.43% 16.66% 17.51% 19.19% 19.47% 19.67% 20.34% 19.97% 20.53% 20.73% 19.39% 19.65% % % %
Net profit margin 7.13% 7.10% 7.27% 14.43% 14.58% 14.62% 14.86% 14.75% 14.87% 15.93% 16.14% 16.96% 12.98% 13.27% 12.96% 13.20% 17.14% 16.06% 16.52% % % %
Return on Investment
Return on equity (ROE) 31.07% 31.28% 32.70% 57.61% 62.08% 63.34% 65.07% 69.57% 75.83% 86.27% 92.48% 106.89% 82.42% 98.56% 101.30% 89.25% 96.37% 95.35% 72.32% % % %
Return on assets (ROA) 4.73% 4.54% 4.59% 9.30% 9.49% 9.88% 10.11% 10.24% 10.11% 10.83% 11.94% 13.08% 10.00% 10.68% 10.23% 10.70% 13.47% 12.91% 13.06% % % %
Source: Based on data from International Business Machines Corp. Quarterly and Annual Reports
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.'s gross profit margin improved from Q4 2017 to Q1 2018 and from Q1 2018 to Q2 2018.
Operating profit margin A profitability ratio calculated as operating income divided by revenue. International Business Machines Corp.'s operating profit margin improved from Q4 2017 to Q1 2018 and from Q1 2018 to Q2 2018.
Net profit margin An indicator of profitability, calculated as net income divided by revenue. International Business Machines Corp.'s net profit margin deteriorated from Q4 2017 to Q1 2018 but then slightly improved from Q1 2018 to Q2 2018.
ROE A profitability ratio calculated as net income divided by shareholders' equity. International Business Machines Corp.'s ROE deteriorated from Q4 2017 to Q1 2018 and from Q1 2018 to Q2 2018.
ROA A profitability ratio calculated as net income divided by total assets. International Business Machines Corp.'s ROA deteriorated from Q4 2017 to Q1 2018 but then improved from Q1 2018 to Q2 2018 exceeding Q4 2017 level.

Gross Profit Margin

International Business Machines Corp., gross profit margin calculation (quarterly data)

Microsoft Excel LibreOffice Calc
Jun 30, 2018 Mar 31, 2018 Dec 31, 2017 Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Sep 30, 2014 Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Mar 31, 2013
Selected Financial Data (USD $ in millions)
Gross profit 9,199  8,247  10,861  8,800  8,794  7,772  10,893  9,013  9,702  8,686  11,406  9,436  10,390  9,452  12,862  10,874  12,044  10,627  14,315  11,380  12,132  10,678 
Revenue 20,003  19,072  22,542  19,153  19,289  18,155  21,771  19,226  20,238  18,684  22,058  19,280  20,813  19,590  24,113  22,397  24,047  22,236  27,699  23,720  24,924  23,408 
Ratio
Gross profit margin1 45.94% 45.85% 45.78% 46.27% 46.50% 47.08% 47.92% 48.38% 48.88% 49.38% 49.77% 50.29% 50.14% 50.18% 50.01% 49.66% 49.50% 49.15% 48.63% % % %
Source: Based on data from International Business Machines Corp. Quarterly and Annual Reports

Q2 2018 Calculations

1 Gross profit margin = 100 × (Gross profitQ2 2018 + Gross profitQ1 2018 + Gross profitQ4 2017 + Gross profitQ3 2017) ÷ (RevenueQ2 2018 + RevenueQ1 2018 + RevenueQ4 2017 + RevenueQ3 2017)
= 100 × (9,199 + 8,247 + 10,861 + 8,800) ÷ (20,003 + 19,072 + 22,542 + 19,153) = 45.94%

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.'s gross profit margin improved from Q4 2017 to Q1 2018 and from Q1 2018 to Q2 2018.

Operating Profit Margin

International Business Machines Corp., operating profit margin calculation (quarterly data)

Microsoft Excel LibreOffice Calc
Jun 30, 2018 Mar 31, 2018 Dec 31, 2017 Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Sep 30, 2014 Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Mar 31, 2013
Selected Financial Data (USD $ in millions)
Operating income 3,228  1,714  4,634  3,118  2,515  1,532  5,007  3,412  3,253  1,433  5,079  3,606  4,039  2,965  5,707  4,384  5,281  3,160  6,960  4,848  4,151  3,640 
Revenue 20,003  19,072  22,542  19,153  19,289  18,155  21,771  19,226  20,238  18,684  22,058  19,280  20,813  19,590  24,113  22,397  24,047  22,236  27,699  23,720  24,924  23,408 
Ratio
Operating profit margin1 15.72% 14.97% 14.91% 15.53% 15.89% 16.63% 16.40% 16.43% 16.66% 17.51% 19.19% 19.47% 19.67% 20.34% 19.97% 20.53% 20.73% 19.39% 19.65% % % %
Source: Based on data from International Business Machines Corp. Quarterly and Annual Reports

Q2 2018 Calculations

1 Operating profit margin = 100 × (Operating incomeQ2 2018 + Operating incomeQ1 2018 + Operating incomeQ4 2017 + Operating incomeQ3 2017) ÷ (RevenueQ2 2018 + RevenueQ1 2018 + RevenueQ4 2017 + RevenueQ3 2017)
= 100 × (3,228 + 1,714 + 4,634 + 3,118) ÷ (20,003 + 19,072 + 22,542 + 19,153) = 15.72%

Ratio Description The company
Operating profit margin A profitability ratio calculated as operating income divided by revenue. International Business Machines Corp.'s operating profit margin improved from Q4 2017 to Q1 2018 and from Q1 2018 to Q2 2018.

Net Profit Margin

International Business Machines Corp., net profit margin calculation (quarterly data)

Microsoft Excel LibreOffice Calc
Jun 30, 2018 Mar 31, 2018 Dec 31, 2017 Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Sep 30, 2014 Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Mar 31, 2013
Selected Financial Data (USD $ in millions)
Net income 2,404  1,679  (1,054) 2,726  2,331  1,750  4,501  2,853  2,504  2,014  4,463  2,950  3,449  2,328  5,483  18  4,137  2,384  6,184  4,041  3,226  3,032 
Revenue 20,003  19,072  22,542  19,153  19,289  18,155  21,771  19,226  20,238  18,684  22,058  19,280  20,813  19,590  24,113  22,397  24,047  22,236  27,699  23,720  24,924  23,408 
Ratio
Net profit margin1 7.13% 7.10% 7.27% 14.43% 14.58% 14.62% 14.86% 14.75% 14.87% 15.93% 16.14% 16.96% 12.98% 13.27% 12.96% 13.20% 17.14% 16.06% 16.52% % % %
Source: Based on data from International Business Machines Corp. Quarterly and Annual Reports

Q2 2018 Calculations

1 Net profit margin = 100 × (Net incomeQ2 2018 + Net incomeQ1 2018 + Net incomeQ4 2017 + Net incomeQ3 2017) ÷ (RevenueQ2 2018 + RevenueQ1 2018 + RevenueQ4 2017 + RevenueQ3 2017)
= 100 × (2,404 + 1,679 + -1,054 + 2,726) ÷ (20,003 + 19,072 + 22,542 + 19,153) = 7.13%

Ratio Description The company
Net profit margin An indicator of profitability, calculated as net income divided by revenue. International Business Machines Corp.'s net profit margin deteriorated from Q4 2017 to Q1 2018 but then slightly improved from Q1 2018 to Q2 2018.

Return on Equity (ROE)

International Business Machines Corp., ROE calculation (quarterly data)

Microsoft Excel LibreOffice Calc
Jun 30, 2018 Mar 31, 2018 Dec 31, 2017 Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Sep 30, 2014 Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Mar 31, 2013
Selected Financial Data (USD $ in millions)
Net income 2,404  1,679  (1,054) 2,726  2,331  1,750  4,501  2,853  2,504  2,014  4,463  2,950  3,449  2,328  5,483  18  4,137  2,384  6,184  4,041  3,226  3,032 
Total IBM stockholders' equity 18,520  18,166  17,594  19,627  18,419  18,327  18,246  17,010  15,733  14,925  14,262  13,294  13,684  12,141  11,868  14,255  17,377  16,607  22,792  19,877  17,756  19,092 
Ratio
ROE1 31.07% 31.28% 32.70% 57.61% 62.08% 63.34% 65.07% 69.57% 75.83% 86.27% 92.48% 106.89% 82.42% 98.56% 101.30% 89.25% 96.37% 95.35% 72.32% % % %
Source: Based on data from International Business Machines Corp. Quarterly and Annual Reports

Q2 2018 Calculations

1 ROE = 100 × (Net incomeQ2 2018 + Net incomeQ1 2018 + Net incomeQ4 2017 + Net incomeQ3 2017) ÷ Total IBM stockholders' equity
= 100 × (2,404 + 1,679 + -1,054 + 2,726) ÷ 18,520 = 31.07%

Ratio Description The company
ROE A profitability ratio calculated as net income divided by shareholders' equity. International Business Machines Corp.'s ROE deteriorated from Q4 2017 to Q1 2018 and from Q1 2018 to Q2 2018.

Return on Assets (ROA)

International Business Machines Corp., ROA calculation (quarterly data)

Microsoft Excel LibreOffice Calc
Jun 30, 2018 Mar 31, 2018 Dec 31, 2017 Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Sep 30, 2014 Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Mar 31, 2013
Selected Financial Data (USD $ in millions)
Net income 2,404  1,679  (1,054) 2,726  2,331  1,750  4,501  2,853  2,504  2,014  4,463  2,950  3,449  2,328  5,483  18  4,137  2,384  6,184  4,041  3,226  3,032 
Total assets 121,622  125,285  125,356  121,636  120,495  117,495  117,470  115,606  118,056  118,856  110,495  108,649  112,729  112,037  117,532  118,911  124,314  122,646  126,223  117,845  115,153  117,258 
Ratio
ROA1 4.73% 4.54% 4.59% 9.30% 9.49% 9.88% 10.11% 10.24% 10.11% 10.83% 11.94% 13.08% 10.00% 10.68% 10.23% 10.70% 13.47% 12.91% 13.06% % % %
Source: Based on data from International Business Machines Corp. Quarterly and Annual Reports

Q2 2018 Calculations

1 ROA = 100 × (Net incomeQ2 2018 + Net incomeQ1 2018 + Net incomeQ4 2017 + Net incomeQ3 2017) ÷ Total assets
= 100 × (2,404 + 1,679 + -1,054 + 2,726) ÷ 121,622 = 4.73%

Ratio Description The company
ROA A profitability ratio calculated as net income divided by total assets. International Business Machines Corp.'s ROA deteriorated from Q4 2017 to Q1 2018 but then improved from Q1 2018 to Q2 2018 exceeding Q4 2017 level.