Evaluation of Corporate Performance

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Evaluation of Corporate Performance
Edgar P. Lucas, Jr.
BUS 401 Principles of Finance
Instructor: Richard Burke
September 1, 2014

History
Incorporated in New York on June 16, 1911 as The Computing-Tabulating-Recording Company as a result of a consolidation of The Computing Scale Company of America, The Tabulating Machine Company and The International Time Recording Company of New York. Present name adopted in 1924 as a result of a merger with International Business Machines Corporation. In Mar. 1922, Co. absorbed Peirce Accounting Machine Company. On Feb. 14, 1924, Co. merged International Business Machines Corporation and assumed the name of that company. Business Summary

International Business Machines operates in five business segments: global technology services, which provides information technology infrastructure and business process services; global business services, which provides business outcomes to Co.'s clients across two primary business areas: Consulting and Application Management Services; software, which consists primarily of middleware and operating systems software; systems and technology, which provides clients with business solutions requiring computing power and storage capabilities; and global financing, which facilitates clients' acquisition of Co.'s systems, software and services. When one examines the financial statements of IBM, they have been a steadily performing corporation for many years. In 2014, their revenue was 98.2 billion dollars. Their net income was 16.7 billion dollars. Current liabilities was 40.1 million dollars and their total liabilities was 103.2 million. Retained earnings were 130 million and total equity is 22.9 million.

After reviewing IBM’s financials, there ae several documented facts: IBM after all expenses, cleared 16,746,000,000. Their basic earnings per share is $15.85. As of February, 2014, IBM has 473,872 shareholders. Their total revenues were 98,267,000,000. The market cap is 191,836,941,600. The dividend is 4.1 and the dividend yield is 2.1321. The P/E ratio is 12.2018. The Pro Forma statements, both Balance Sheet and Income Statement reflecting a 10 percent growth rate are as follows: International Business Machines Corp. (NYS: IBM)

 
 
Pro Forma Financial Statement
 
 
Exchange rate used is that of the Year End reported date
 
 
 
 
 
 
 
 
As Reported Annual Balance Sheet
 
 
Report Date
12/31/2014
12/31/2013
Currency
USD
USD
Audit Status
Not Qualified
Not Qualified
Consolidated
Yes
Yes
Scale
Thousands
Thousands
Cash & cash equivalents
10716000
10716000
Marketable securities
350000
350000
Notes & accounts receivable - trade, net
10465000
10465000
Short-term financing receivables
19787000
19787000
Other accounts receivable
1584000
1584000
Finished goods
444000
444000
Work in process & raw materials
1866000
1866000
Inventories
2310000
2310000
Deferred taxes
1651000
1651000
Prepaid expenses & other current assets
4488000
4488000
Total current assets
51350000
51350000
Land & land improvements
706000
706000
Buildings & building improvements
9680000
9680000
Plant, laboratory & office equipment
28169000
28169000
Plant & other property, gross
38555000
38555000
Less: accumulated depreciation
25576000
25576000
Plant & other property, net
12979000
12979000
Rental machines, gross
1920000
1920000
Less: accumulated depreciation - rental machines
1078000
1078000
Rental machines, net
842000
842000
Property, plant & equipment, gross
40475000
40475000
Less: accumulated depreciation
26654000
26654000
Property, plant & equipment, net
13821000
13821000
Long-term financing receivables
12755000
12755000
Prepaid pension assets
5551000
5551000
Deferred taxes
3051000
3051000
Goodwill
31184000
31184000
Intangible assets, net
3871000
3871000
Deferred transition & set-up costs & other deferred...
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