Accounting 10 Chapter 13 Assignment--50 Points Name

Use the IBM Financial Report and the IBM Financial Statements Only files found at the Wileyplus website under Chapter 13 Materials to answer the following questions. NOTE: FOR ANY RATIO THAT REQUIRES YOU TO USE NET SALES IN THE COMPUTATION, USE TOTAL REVENUE FROM THE INCOME STATEMENT.

Round all amounts to the nearest two decimal places.

1. What is IBM's current ratio on December 31, 2018?

2. What is IBM's acid-test or quick ratio on December 31, 2018?

3. What is IBM's Receivable Turnover for 2018?

   (NOTE: use the TRADE receivables only)

4. What is the number of days to collect accounts receivable for IBM for 2018?

5. What is IBM's inventory turnover for 2018?

   (NOTE--use TOTAL COST for Cost of Goods Sold)

6. What is IBM's days to sell inventory for 2018?

7. What is IBM's conversion period for 2018?

8. What is IBM's asset turnover for 2018?

9. What is IBM's profit margin on sales or return on sales for 2018?

10. What is IBM's return on assets for 2018?

11. What is IBM's cash return on sales for 2018?

12. What is IBM's return on TOTAL common stockholders' equity for 2018?

    Note: Use IBM'S Stockholders' Equity only

13. What is IBM's TOTAL basic (no dilution) earnings per share for 2018?

14. What is IBM's TOTAL earnings per share assuming dilution for 2018?

15. What is IBM's price to earnings ratio for 2018?

    (NOTE--use the TOTAL earnings per share assuming dilution and assume a stock price of $109.75)

16. What is IBM's payout ratio for 2018?

    (Note--cash dividends paid on common stock can be found on the Five-Year Comparison of Selected Data on Page 147 of the annual report--the third to last page in the .pdf IBM Financial Report

17. What is IBM's debt to total assets on December 31, 2018?

18. What is times interest earned for IBM for 2018?

19. What is IBM's cash debt coverage for 2018?

20. How many shares of IBM common stock have been authorized as of December 31, 2018?

21. How many shares of IBM common stock have been issued as of December 31, 2018?

22. How many of the issued shares of IBM common stock are being held as treasury shares as of December 31, 2018?

23. How many shares of IBM common stock are outstanding as of December 31, 2018?

24. What is the par value of IBM's common stock?

25. What is IBM's book value per share outstanding on December 31, 2018?

    (NOTE: Use IBM's Stockholders' Equity--don't forget that financial statement dollar amounts are in millions of dollars)

26. What is IBM's comprehensive income for 2018 (in millions of dollars)?

27. Was the computation of comprehensive income for IBM shown 1-at the bottom of the income statement; 2-on a separate schedule reconciling net income to comprehensive income; or 3-on the expanded statement of equity?

28. Was IBM's cash flow statement prepared using the direct or indirect method?

29. Which SPECIFIC investing or financing activity USED the most cash during 2018?

30. Which SPECIFIC investing or financing activity PROVIDED the most cash during 2018?

31. On the Statement of Financial Position (Balance Sheet) on December 31, 2018, what does the balance of the account "Noncontrolling Interest" represent?

    Use the information in the "Significant Accounting Policies" in the complete financial report to answer the questions 31 - 35. On the financials,the LETTER of the note giving further explanation of the account is given.

32. Are IBM's marketable DEBT securities accounted for as trading securities or available for sale securities? (Page 86 of the complete financial report)

    On which financial statement are the unrealized gains and losses on valuation of these debt securities reported?

33. IBM's Business Segments acquired 2 companies during the year. Name the two companies.

    (SEE NOTE C)

What company does IBM expect to complete acquisition of in 2019?

34. What depreciation method does IBM use ? (SEE NOTE A)

35. IBM is organized into how many different business segments? Name two of them.

    (SEE NOTE U)

36. Who is IBM's auditor? What opinion did they issue for 2018?

37. Compute the PERCENT OF CHANGE from 2017 to 2018 in Total Liabilities, Total Assets, Total Revenue, and Net Income. Be sure to indicate whether the change is positive or negative

2018 2017

$ Change

% of Change

Total Liabilities Total Assets Total Revenues Net Income

38. Prepare a VERTICAL ANALYSIS or common-size income statement for 2018 for the following items only: Total Revenue, Total Cost, Gross Profit, Total Expense and Other Income, Income from Continuing Operations Before Income Taxes, Provision for Income Taxes, Income from Continuing Operatings, Loss from Discontinued Operations, and Net Income

Vertical Analysis

Total Revenue Total Cost Gross profit Total Expense and Other Income Income from Cont Ops Before Taxes Provision for Income Taxes

Income from Continuing Ops Loss/Gain from Disc Operations Net Income

79,591 42,655 36,936 25,594 11,342

2,619 8,723 5 8,728

39. Use the Five Year Comparison of Selected Financial Data on page 147 of the complete financial report (third to last page of the .pdf) Prepare a TREND analysis for Revenue and Net Income for 2014-2018 using 2014 as the base year.

Revenue Trend

Net Income Trend

2018 2017 2016 2015 2014