Ibm Financial Analysis
1. IBM: A Systematic Financial Analysis.
1.1 Introduction In order to make informed investment decisions, potential investors should carefully analyze all available information about the company (or companies) that they are planning to add to their portfolios. One such way is by performing a systematic financial analysis for each of the companies in question (Giroux 2003). The results of this analysis can then be used to determine whether or not the company presents a sound investment opportunity. International Business Machines Corporation (IBM) operates as an information technology (IT) company worldwide. The company has three segments: Systems and Financing, Software, and Services. The Systems and Financing segment offers various systems that include servers, data storage products, integrated supply chain services, lease and loan financing to external and internal clients, among other types of financing services. The Software segment provides database and content management software solutions, Lotus collaboration and messaging software, and other infrastructure management solutions. The Services segment primarily offers business performance transformation services, business consulting services, and performance management services, among a myriad of other network optimization packages (IBM Annual Report). At first glance, the company seems to be financially strong and a good investment opportunity. However, before making a final decision, a comprehensive analysis on the company’s financial position needs to be performed.
1.2 Purpose The purpose of this analysis is to determine whether or not IBM represents a wise investment choice.
2. Corporate Overview
2.1 Industry Analysis
2.1.1 Economic Conditions Over the last couple of years, the country has recovered from the economic problems faced during the end of 2001 and most of 2002. This period of induced expansion was fueled, mainly, by fiscal policy - tax breaks,
1.1 Introduction In order to make informed investment decisions, potential investors should carefully analyze all available information about the company (or companies) that they are planning to add to their portfolios. One such way is by performing a systematic financial analysis for each of the companies in question (Giroux 2003). The results of this analysis can then be used to determine whether or not the company presents a sound investment opportunity. International Business Machines Corporation (IBM) operates as an information technology (IT) company worldwide. The company has three segments: Systems and Financing, Software, and Services. The Systems and Financing segment offers various systems that include servers, data storage products, integrated supply chain services, lease and loan financing to external and internal clients, among other types of financing services. The Software segment provides database and content management software solutions, Lotus collaboration and messaging software, and other infrastructure management solutions. The Services segment primarily offers business performance transformation services, business consulting services, and performance management services, among a myriad of other network optimization packages (IBM Annual Report). At first glance, the company seems to be financially strong and a good investment opportunity. However, before making a final decision, a comprehensive analysis on the company’s financial position needs to be performed.
1.2 Purpose The purpose of this analysis is to determine whether or not IBM represents a wise investment choice.
2. Corporate Overview
2.1 Industry Analysis
2.1.1 Economic Conditions Over the last couple of years, the country has recovered from the economic problems faced during the end of 2001 and most of 2002. This period of induced expansion was fueled, mainly, by fiscal policy - tax breaks,
References: <Text Books> Benninga, Simon Z., Sarig, Oded H., (1997) CORPORATE FINANCE: A VALUATION APPROACH. United States of America: The McGraw-Hill Companies. Giroux, Gary (2003) Core Concepts of Financial Analysis A User Approach. United States of America: John Wiley & Sons, Inc. <Websites> Dell Inc. 2006. [Online]. Available from http://www.dell.com . [Accessed Fall 2006]. Hewlett-Packard Co. 2006. [Online]. Available from http://www.hp.com . [Accessed Fall 2006]. International Business Machines. 2006. [Online]. Available from http://www.ibm.com . [Accessed Fall 2006]. Value Line Investment Survey. 2006. [Online]. Available from http://www.valueline.com . [Accessed Fall 2006]. Yahoo Finance. 2006. [Online]. Available from http://finance.yahoo.com . [Accessed Fall 2006].