Microsoft Excel LibreOffice Calc

International Business Machines Corp. (IBM)


Analysis of Short-term (Operating) Activity Ratios

Beginner level


Short-term Activity Ratios (Summary)

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

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Turnover Ratios
Inventory turnover 25.11 25.36 27.11 26.80 26.47
Receivables turnover 9.80 10.71 8.86 8.70 9.81
Payables turnover 8.30 6.50 6.65 6.70 6.81
Working capital turnover 107.30 7.29 6.40 10.50 9.93
Average No. Days
Average inventory processing period 15 14 13 14 14
Add: Average receivable collection period 37 34 41 42 37
Operating cycle 52 48 54 56 51
Less: Average payables payment period 44 56 55 54 54
Cash conversion cycle 8 -8 -1 2 -3

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).

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.’s inventory turnover ratio deteriorated from 2017 to 2018 and from 2018 to 2019.
Receivables turnover An activity ratio equal to revenue divided by receivables. International Business Machines Corp.’s receivables turnover ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. International Business Machines Corp.’s payables turnover ratio decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.
Working capital turnover An activity ratio calculated as revenue divided by working capital. International Business Machines Corp.’s working capital turnover ratio improved from 2017 to 2018 and from 2018 to 2019.

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.’s number of days of inventory outstanding deteriorated from 2017 to 2018 and from 2018 to 2019.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. International Business Machines Corp.’s number of days of receivables outstanding improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.
Operating cycle Equal to average inventory processing period plus average receivables collection period. International Business Machines Corp.’s operating cycle improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.
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.’s number of days of payables outstanding increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.
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.’s cash conversion cycle improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Inventory Turnover

International Business Machines Corp., inventory turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Cost 40,659  42,655  42,912  41,625  41,057 
Inventory 1,619  1,682  1,583  1,553  1,551 
Short-term Activity Ratio
Inventory turnover1 25.11 25.36 27.11 26.80 26.47
Benchmarks
Inventory Turnover, Competitors2
Alphabet Inc. 71.97 53.79 60.86 131.11 57.36
Microsoft Corp. 20.80 14.41 15.71 14.56 11.38
Oracle Corp. 24.98 20.30 24.90 35.28 23.99
Inventory Turnover, Sector
Software & Computer Services 36.50 27.86 29.03 28.95 21.95
Inventory Turnover, Industry
Technology 12.89 13.02 11.91 14.17 14.35

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
Inventory turnover = Cost ÷ Inventory
= 40,659 ÷ 1,619 = 25.11

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.’s inventory turnover ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Receivables Turnover

International Business Machines Corp., receivables turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Revenue 77,147  79,591  79,139  79,919  81,741 
Notes and accounts receivable, trade, net of allowances 7,870  7,432  8,928  9,182  8,333 
Short-term Activity Ratio
Receivables turnover1 9.80 10.71 8.86 8.70 9.81
Benchmarks
Receivables Turnover, Competitors2
Adobe Inc. 7.28 6.86 5.99 7.03 7.14
Alphabet Inc. 6.39 6.57 6.05 6.39 6.49
Facebook Inc. 7.43 7.36 6.97 6.92 7.01
Intuit Inc. 77.98 60.86 50.26 43.46 46.07
Microsoft Corp. 4.26 4.17 4.54 4.67 5.23
Oracle Corp. 7.69 7.55 7.12 6.88 6.80
salesforce.com inc. 2.70 2.68 2.63 2.67 2.82
Receivables Turnover, Sector
Software & Computer Services 6.03 6.14 6.05 6.20 6.60
Receivables Turnover, Industry
Technology 7.52 7.60 7.77 8.16 8.72

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
Receivables turnover = Revenue ÷ Notes and accounts receivable, trade, net of allowances
= 77,147 ÷ 7,870 = 9.80

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.’s receivables turnover ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

Payables Turnover

International Business Machines Corp., payables turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Cost 40,659  42,655  42,912  41,625  41,057 
Accounts payable 4,896  6,558  6,451  6,209  6,028 
Short-term Activity Ratio
Payables turnover1 8.30 6.50 6.65 6.70 6.81
Benchmarks
Payables Turnover, Competitors2
Adobe Inc. 7.98 6.42 8.90 9.31 7.98
Alphabet Inc. 12.93 13.60 14.53 17.22 14.59
Facebook Inc. 9.37 11.41 14.35 12.55 14.63
Intuit Inc. 4.26 5.49 5.15 4.09 3.82
Microsoft Corp. 4.57 4.45 4.64 4.75 5.01
Oracle Corp. 13.78 15.28 12.47 14.84 9.34
salesforce.com inc.
Payables Turnover, Sector
Software & Computer Services 8.20 7.66 7.67 7.64 7.29
Payables Turnover, Industry
Technology 5.48 4.77 4.76 5.38 5.70

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
Payables turnover = Cost ÷ Accounts payable
= 40,659 ÷ 4,896 = 8.30

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.’s payables turnover ratio decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.

Working Capital Turnover

International Business Machines Corp., working capital turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Current assets 38,420  49,146  49,735  43,888  42,504 
Less: Current liabilities 37,701  38,227  37,363  36,275  34,269 
Working capital 719  10,919  12,372  7,613  8,235 
 
Revenue 77,147  79,591  79,139  79,919  81,741 
Short-term Activity Ratio
Working capital turnover1 107.30 7.29 6.40 10.50 9.93
Benchmarks
Working Capital Turnover, Competitors2
Adobe Inc. 16.24 1.96 1.93 1.84
Alphabet Inc. 1.51 1.35 1.11 1.02 1.06
Facebook Inc. 1.38 1.28 0.91 0.88 0.91
Intuit Inc. 4.17 20.71 5.14
Microsoft Corp. 1.19 0.99 0.94 1.06 1.25
Oracle Corp. 1.42 0.70 0.75 0.79 0.80
salesforce.com inc.
Working Capital Turnover, Sector
Software & Computer Services 1.73 1.39 1.24 1.32 1.43
Working Capital Turnover, Industry
Technology 2.40 2.23 1.72 1.90 2.11

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
Working capital turnover = Revenue ÷ Working capital
= 77,147 ÷ 719 = 107.30

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital. International Business Machines Corp.’s working capital turnover ratio improved from 2017 to 2018 and from 2018 to 2019.

Average Inventory Processing Period

International Business Machines Corp., average inventory processing period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data
Inventory turnover 25.11 25.36 27.11 26.80 26.47
Short-term Activity Ratio (no. days)
Average inventory processing period1 15 14 13 14 14
Benchmarks (no. days)
Average Inventory Processing Period, Competitors2
Alphabet Inc. 5 7 6 3 6
Microsoft Corp. 18 25 23 25 32
Oracle Corp. 15 18 15 10 15
Average Inventory Processing Period, Sector
Software & Computer Services 10 13 13 13 17
Average Inventory Processing Period, Industry
Technology 28 28 31 26 25

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
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 25.11 = 15

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.’s number of days of inventory outstanding deteriorated from 2017 to 2018 and from 2018 to 2019.

Average Receivable Collection Period

International Business Machines Corp., average receivable collection period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data
Receivables turnover 9.80 10.71 8.86 8.70 9.81
Short-term Activity Ratio (no. days)
Average receivable collection period1 37 34 41 42 37
Benchmarks (no. days)
Average Receivable Collection Period, Competitors2
Adobe Inc. 50 53 61 52 51
Alphabet Inc. 57 56 60 57 56
Facebook Inc. 49 50 52 53 52
Intuit Inc. 5 6 7 8 8
Microsoft Corp. 86 88 80 78 70
Oracle Corp. 47 48 51 53 54
salesforce.com inc. 135 136 139 137 129
Average Receivable Collection Period, Sector
Software & Computer Services 60 59 60 59 55
Average Receivable Collection Period, Industry
Technology 49 48 47 45 42

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
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 9.80 = 37

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.’s number of days of receivables outstanding improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

Operating Cycle

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

No. days

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data
Average inventory processing period 15 14 13 14 14
Average receivable collection period 37 34 41 42 37
Short-term Activity Ratio
Operating cycle1 52 48 54 56 51
Benchmarks
Operating Cycle, Competitors2
Alphabet Inc. 62 63 66 60 62
Microsoft Corp. 104 113 103 103 102
Oracle Corp. 62 66 66 63 69
Operating Cycle, Sector
Software & Computer Services 70 72 73 72 72
Operating Cycle, Industry
Technology 77 76 78 71 67

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
Operating cycle = Average inventory processing period + Average receivable collection period
= 15 + 37 = 52

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.’s operating cycle improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.

Average Payables Payment Period

International Business Machines Corp., average payables payment period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data
Payables turnover 8.30 6.50 6.65 6.70 6.81
Short-term Activity Ratio (no. days)
Average payables payment period1 44 56 55 54 54
Benchmarks (no. days)
Average Payables Payment Period, Competitors2
Adobe Inc. 46 57 41 39 46
Alphabet Inc. 28 27 25 21 25
Facebook Inc. 39 32 25 29 25
Intuit Inc. 86 66 71 89 96
Microsoft Corp. 80 82 79 77 73
Oracle Corp. 26 24 29 25 39
salesforce.com inc.
Average Payables Payment Period, Sector
Software & Computer Services 45 48 48 48 50
Average Payables Payment Period, Industry
Technology 67 77 77 68 64

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
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 8.30 = 44

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.’s number of days of payables outstanding increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.

Cash Conversion Cycle

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

No. days

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data
Average inventory processing period 15 14 13 14 14
Average receivable collection period 37 34 41 42 37
Average payables payment period 44 56 55 54 54
Short-term Activity Ratio
Cash conversion cycle1 8 -8 -1 2 -3
Benchmarks
Cash Conversion Cycle, Competitors2
Alphabet Inc. 34 36 41 39 37
Microsoft Corp. 24 31 24 26 29
Oracle Corp. 36 42 37 38 30
Cash Conversion Cycle, Sector
Software & Computer Services 25 24 25 24 22
Cash Conversion Cycle, Industry
Technology 10 -1 1 3 3

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
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 15 + 3744 = 8

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.’s cash conversion cycle improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.