Question
Comparative financial data for IBM Corporation for the years ended December 31, 2023, 2022, and 2021 are provided below. IBM Corporation Comparative Income Statements 2023
Comparative financial data for IBM Corporation for the years ended December 31, 2023, 2022, and 2021 are provided below.
IBM Corporation Comparative Income Statements | 2023 | 2022 | 2021 |
Sales | $350,000,000 | $320,000,000 | $300,000,000 |
Cost of goods sold | $210,000,000 | $192,000,000 | $180,000,000 |
Gross profit | $140,000,000 | $128,000,000 | $120,000,000 |
Operating expenses | $70,000,000 | $65,000,000 | $60,000,000 |
Income from operations | $70,000,000 | $63,000,000 | $60,000,000 |
Interest expense | $7,000,000 | $6,300,000 | $6,000,000 |
Income before taxes | $63,000,000 | $56,700,000 | $54,000,000 |
Income tax expense | $18,900,000 | $17,010,000 | $16,200,000 |
Net income | $44,100,000 | $39,690,000 | $37,800,000 |
IBM Corporation Comparative Balance Sheets | 2023 | 2022 | 2021 |
Assets | |||
Current assets | $70,000,000 | $65,000,000 | $60,000,000 |
Long-term investments | $90,000,000 | $85,000,000 | $80,000,000 |
Property and equipment, net | $140,000,000 | $130,000,000 | $120,000,000 |
Total assets | $300,000,000 | $280,000,000 | $260,000,000 |
Liabilities and Equity | |||
Current liabilities | $50,000,000 | $45,000,000 | $40,000,000 |
Long-term debt | $100,000,000 | $95,000,000 | $90,000,000 |
Common stock | $80,000,000 | $80,000,000 | $80,000,000 |
Retained earnings | $70,000,000 | $60,000,000 | $50,000,000 |
Total liabilities and equity | $300,000,000 | $280,000,000 | $260,000,000 |
Requirements:
- Calculate common-size income statements for 2023, 2022, and 2021.
- Calculate common-size balance sheets for 2023, 2022, and 2021.
- Determine IBM’s operating margin and net profit margin for the three years.
- Analyze the trend in IBM’s current ratio and debt-to-equity ratio over the three years.
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