Stock Analysis on Net

International Business Machines Corp. (NYSE:IBM)

Analysis of Short-term (Operating) Activity Ratios 

Microsoft Excel LibreOffice Calc

Short-term Activity Ratios (Summary)

International Business Machines Corp., short-term (operating) activity ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Turnover Ratios
Inventory turnover 15.68 20.69 25.11 25.36 27.11
Receivables turnover 8.49 10.32 9.80 10.71 8.86
Payables turnover 6.54 7.75 8.30 6.50 6.65
Working capital turnover 107.30 7.29 6.40
Average No. Days
Average inventory processing period 23 18 15 14 13
Add: Average receivable collection period 43 35 37 34 41
Operating cycle 66 53 52 48 54
Less: Average payables payment period 56 47 44 56 55
Cash conversion cycle 10 6 8 -8 -1

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).

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. International Business Machines Corp. inventory turnover ratio deteriorated from 2019 to 2020 and from 2020 to 2021.
Receivables turnover An activity ratio equal to revenue divided by receivables. International Business Machines Corp. receivables turnover ratio improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. International Business Machines Corp. payables turnover ratio decreased from 2019 to 2020 and from 2020 to 2021.

Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. International Business Machines Corp. number of days of inventory outstanding deteriorated from 2019 to 2020 and from 2020 to 2021.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. International Business Machines Corp. number of days of receivables outstanding improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.
Operating cycle Equal to average inventory processing period plus average receivables collection period. International Business Machines Corp. operating cycle deteriorated from 2019 to 2020 and from 2020 to 2021.
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. International Business Machines Corp. number of days of payables outstanding increased from 2019 to 2020 and from 2020 to 2021.
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. International Business Machines Corp. cash conversion cycle improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.

Inventory Turnover

International Business Machines Corp., inventory turnover 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)
Cost 25,864  38,045  40,659  42,655  42,912 
Inventory 1,649  1,839  1,619  1,682  1,583 
Short-term Activity Ratio
Inventory turnover1 15.68 20.69 25.11 25.36 27.11
Benchmarks
Inventory Turnover, Competitors2
Microsoft Corp. 19.81 24.32 20.80 14.41 15.71
Oracle Corp. 55.32 37.62 24.98 20.30 24.90
Inventory Turnover, Sector
Software & Services 46.13 49.72 48.20 38.18 40.83
Inventory Turnover, Industry
Information Technology 12.02 12.84 12.97 13.26 12.54

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
Inventory turnover = Cost ÷ Inventory
= 25,864 ÷ 1,649 = 15.68

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. International Business Machines Corp. inventory turnover ratio deteriorated from 2019 to 2020 and from 2020 to 2021.

Receivables Turnover

International Business Machines Corp., receivables turnover 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)
Revenue 57,350  73,620  77,147  79,591  79,139 
Notes and accounts receivable, trade, net of allowances 6,754  7,132  7,870  7,432  8,928 
Short-term Activity Ratio
Receivables turnover1 8.49 10.32 9.80 10.71 8.86
Benchmarks
Receivables Turnover, Competitors2
Accenture PLC 5.74 6.16 5.79 8.33 8.05
Adobe Inc. 8.41 9.20 7.28 6.86 5.99
Automatic Data Processing Inc. 5.50 5.98 5.81 6.72 7.27
Fidelity National Information Services Inc. 11.40 18.96 15.97 29.98 31.35
Intuit Inc. 24.64 51.54 77.98 60.86 50.26
Mastercard Inc. 14.32 8.97 5.64 6.10 9.09
Microsoft Corp. 4.42 4.47 4.26 4.17 4.54
Oracle Corp. 7.48 7.04 7.69 7.55 7.12
PayPal Holdings Inc. 31.71 37.18 40.86 49.36 46.27
salesforce.com inc. 2.73 2.77 2.70 2.68 2.63
ServiceNow Inc. 4.24 4.48 4.14 4.54 4.44
Visa Inc. 13.71 17.28 7.54 13.03 12.91
Receivables Turnover, Sector
Software & Services 5.96 6.36 6.01 6.56 6.83
Receivables Turnover, Industry
Information Technology 7.89 8.40 7.73 7.99 8.38

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
Receivables turnover = Revenue ÷ Notes and accounts receivable, trade, net of allowances
= 57,350 ÷ 6,754 = 8.49

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. International Business Machines Corp. receivables turnover ratio improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.

Payables Turnover

International Business Machines Corp., payables turnover 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)
Cost 25,864  38,045  40,659  42,655  42,912 
Accounts payable 3,955  4,908  4,896  6,558  6,451 
Short-term Activity Ratio
Payables turnover1 6.54 7.75 8.30 6.50 6.65
Benchmarks
Payables Turnover, Competitors2
Accenture PLC 15.03 22.48 18.16 21.62 16.87
Adobe Inc. 5.98 5.63 7.98 6.42 8.90
Automatic Data Processing Inc. 61.24 82.80 64.44 57.92 48.56
Fidelity National Information Services Inc. 1.64 1.69 1.56 5.73 6.51
Intuit Inc. 2.70 4.52 4.26 5.49 5.15
Mastercard Inc. 20.68 10.37 6.22 6.83 9.31
Microsoft Corp. 3.44 3.68 4.57 4.45 4.64
Oracle Corp. 10.54 12.46 13.78 15.28 12.47
PayPal Holdings Inc. 68.27 45.45 42.18 29.40 26.05
salesforce.com inc.
ServiceNow Inc. 15.20 28.83 15.04 20.26 15.56
Visa Inc. 9.87 12.58 5.76 9.51 9.17
Payables Turnover, Sector
Software & Services 6.35 6.87 6.81 7.81 7.91
Payables Turnover, Industry
Information Technology 5.22 5.53 5.27 4.91 4.96

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
Payables turnover = Cost ÷ Accounts payable
= 25,864 ÷ 3,955 = 6.54

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. International Business Machines Corp. payables turnover ratio decreased from 2019 to 2020 and from 2020 to 2021.

Working Capital Turnover

International Business Machines Corp., working capital turnover 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)
Current assets 29,539  39,165  38,420  49,146  49,735 
Less: Current liabilities 33,619  39,869  37,701  38,227  37,363 
Working capital (4,080) (704) 719  10,919  12,372 
 
Revenue 57,350  73,620  77,147  79,591  79,139 
Short-term Activity Ratio
Working capital turnover1 107.30 7.29 6.40
Benchmarks
Working Capital Turnover, Competitors2
Accenture PLC 12.77 8.71 9.85 12.12 16.17
Adobe Inc. 9.09 4.89 16.24 1.96
Automatic Data Processing Inc. 5.67 10.15 8.27 8.14 4.35
Fidelity National Information Services Inc. 13.85
Intuit Inc. 3.85 1.73 4.17 20.71
Mastercard Inc. 4.99 2.11 3.38 3.27 2.50
Microsoft Corp. 1.76 1.30 1.19 0.99 0.94
Oracle Corp. 1.29 1.12 1.42 0.70 0.75
PayPal Holdings Inc. 2.66 1.71 1.54 2.19 1.34
salesforce.com inc. 5.11 15.29
ServiceNow Inc. 21.76 5.76 46.69 7.86 6.24
Visa Inc. 2.03 1.66 3.04 2.98 2.03
Working Capital Turnover, Sector
Software & Services 2.92 2.25 2.48 1.83 1.76
Working Capital Turnover, Industry
Information Technology 3.92 2.87 3.11 2.84 2.14

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
Working capital turnover = Revenue ÷ Working capital
= 57,350 ÷ -4,080 =

2 Click competitor name to see calculations.


Average Inventory Processing Period

International Business Machines Corp., average inventory processing period 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
Inventory turnover 15.68 20.69 25.11 25.36 27.11
Short-term Activity Ratio (no. days)
Average inventory processing period1 23 18 15 14 13
Benchmarks (no. days)
Average Inventory Processing Period, Competitors2
Microsoft Corp. 18 15 18 25 23
Oracle Corp. 7 10 15 18 15
Average Inventory Processing Period, Sector
Software & Services 8 7 8 10 9
Average Inventory Processing Period, Industry
Information Technology 30 28 28 28 29

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
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 15.68 = 23

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. International Business Machines Corp. number of days of inventory outstanding deteriorated from 2019 to 2020 and from 2020 to 2021.

Average Receivable Collection Period

International Business Machines Corp., average receivable collection period 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
Receivables turnover 8.49 10.32 9.80 10.71 8.86
Short-term Activity Ratio (no. days)
Average receivable collection period1 43 35 37 34 41
Benchmarks (no. days)
Average Receivable Collection Period, Competitors2
Accenture PLC 64 59 63 44 45
Adobe Inc. 43 40 50 53 61
Automatic Data Processing Inc. 66 61 63 54 50
Fidelity National Information Services Inc. 32 19 23 12 12
Intuit Inc. 15 7 5 6 7
Mastercard Inc. 25 41 65 60 40
Microsoft Corp. 83 82 86 88 80
Oracle Corp. 49 52 47 48 51
PayPal Holdings Inc. 12 10 9 7 8
salesforce.com inc. 134 132 135 136 139
ServiceNow Inc. 86 82 88 80 82
Visa Inc. 27 21 48 28 28
Average Receivable Collection Period, Sector
Software & Services 61 57 61 56 53
Average Receivable Collection Period, Industry
Information Technology 46 43 47 46 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
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 8.49 = 43

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. International Business Machines Corp. number of days of receivables outstanding improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.

Operating Cycle

International Business Machines Corp., operating cycle calculation, comparison to benchmarks

No. days

Microsoft Excel LibreOffice Calc
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Selected Financial Data
Average inventory processing period 23 18 15 14 13
Average receivable collection period 43 35 37 34 41
Short-term Activity Ratio
Operating cycle1 66 53 52 48 54
Benchmarks
Operating Cycle, Competitors2
Microsoft Corp. 101 97 104 113 103
Oracle Corp. 56 62 62 66 66
Operating Cycle, Sector
Software & Services 69 64 69 66 62
Operating Cycle, Industry
Information Technology 76 71 75 74 73

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 cycle = Average inventory processing period + Average receivable collection period
= 23 + 43 = 66

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. International Business Machines Corp. operating cycle deteriorated from 2019 to 2020 and from 2020 to 2021.

Average Payables Payment Period

International Business Machines Corp., average payables payment period 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
Payables turnover 6.54 7.75 8.30 6.50 6.65
Short-term Activity Ratio (no. days)
Average payables payment period1 56 47 44 56 55
Benchmarks (no. days)
Average Payables Payment Period, Competitors2
Accenture PLC 24 16 20 17 22
Adobe Inc. 61 65 46 57 41
Automatic Data Processing Inc. 6 4 6 6 8
Fidelity National Information Services Inc. 223 216 233 64 56
Intuit Inc. 135 81 86 66 71
Mastercard Inc. 18 35 59 53 39
Microsoft Corp. 106 99 80 82 79
Oracle Corp. 35 29 26 24 29
PayPal Holdings Inc. 5 8 9 12 14
salesforce.com inc.
ServiceNow Inc. 24 13 24 18 23
Visa Inc. 37 29 63 38 40
Average Payables Payment Period, Sector
Software & Services 57 53 54 47 46
Average Payables Payment Period, Industry
Information Technology 70 66 69 74 74

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
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 6.54 = 56

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. International Business Machines Corp. number of days of payables outstanding increased from 2019 to 2020 and from 2020 to 2021.

Cash Conversion Cycle

International Business Machines Corp., cash conversion cycle calculation, comparison to benchmarks

No. days

Microsoft Excel LibreOffice Calc
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Selected Financial Data
Average inventory processing period 23 18 15 14 13
Average receivable collection period 43 35 37 34 41
Average payables payment period 56 47 44 56 55
Short-term Activity Ratio
Cash conversion cycle1 10 6 8 -8 -1
Benchmarks
Cash Conversion Cycle, Competitors2
Microsoft Corp. -5 -2 24 31 24
Oracle Corp. 21 33 36 42 37
Cash Conversion Cycle, Sector
Software & Services 12 11 15 19 16
Cash Conversion Cycle, Industry
Information Technology 6 5 6 0 -1

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
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 23 + 4356 = 10

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. International Business Machines Corp. cash conversion cycle improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.