While this final may seem daunting, if you read through the instructions carefully, it will make it much easier to complete. There is a lot of information provided to you.

For your final assignment, you will be analyzingInternational Business Machines Corp. (IBM). There are two parts to the final assignment:

1. Complete a financial analysis using an Excel file
2. Prepare a written report of your findings

Excel File

On the Excel file, you will be expected to calculate the following ratios for IBM:

• Profitability Ratios -Quick Reminder
• Solvency Ratio
• Liquidity Ratios
• Efficiency Ratios
• Cash Conversion Cycle -CCC-Explained
• Horizontal Variance Analysis
• Vertical Variance Analysis
• Free Cash Flow

The Excel workbook is color coded and includes all the formulas and data you will need to complete this part of the assignment.

Excel Workbook:Final Ratio Analysis New-1.xlsxDownload Final Ratio Analysis New-1.xlsx

Once you have completed the ratio analysis, you are to prepare an APA 7.0 formatted paper to discuss your findings.

The following sections should be covered in the paper:

Introduction

• Introduce the company you are analyzing, the years you are analyzing and where the data came from. The data you are using came from IBM's 10-k filing with the Securities and Exchange Commission.
• Then, set the stage for what you will be writing about: Analyzing certain ratios of the company to determine if activity is improving, or not. Make sure to mention the sections for your paper in the introduction.

How the Company Makes Money

This is a comprehensive article that discusses how IBM makes money.

https://www.investopedia.com/how-ibm-makes-money-4798528Links to an external site.

• In this section, find information about IBM and how the company makes money. While it seems simple to state that IBM makes computers, they do a lot more than that.

Revenue Recognition

• There is a pdf file attached - IBM Annual Report 2020. When you open this file, if you hit Control+F, a search box will appear. Type in revenue recognition to find the results of where the annual report discusses revenue recognition. Please keep in mind that the financials you are conducting your analysis on came from SEC.gov - not the annual report. As discussed in one of the lectures, the numbers from the SEC.gov and an annual report can differ because an Annual Report is sometimes not audited. However, the annual report does provide information on revenue recognition.
• In this section, explain how IBM recognizes revenue for the various products and services it provides.