← International Business Machines
The business behind the dividend
| Measure | IBM | Median | Formula |
|---|---|---|---|
| Return on equity | 32.4% | 11.7% | Net income ÷ shareholders’ equity |
| Return on capital employed | 11.8% | 10.1% | Operating income ÷ (equity + total debt) |
| Owner earnings | $11.79bn | $632.00m | Net income + depreciation & amortisation − capital expenditure |
| Free cash flow | $12.10bn | $746.10m | Operating cash flow − capital expenditure |
| Operating margin | 15.3% | 15.0% | Operating income ÷ revenue |
| Net margin | 15.7% | 10.2% | Net income ÷ revenue |
| Debt to equity | 1.68x | 0.79x | Total debt ÷ shareholders’ equity |
| Interest cover | 5.34x | 4.43x | Operating income ÷ interest expense |
| Current ratio | 0.96x | 1.25x | Current assets ÷ current liabilities |
| Long-term debt to working capital | — | — | Long-term debt ÷ (current assets − current liabilities) |
| Cash conversion | 1.25x | 1.78x | Operating cash flow ÷ net income |
Not computed here: Long-term debt to working capital — why a blank is not a zero.
Ten years of it
The same measures, for every year the filings support. One year is a fact; a row is a business.
| Measure | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | Median |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Return on equity | 32.4% | 22.1% | 33.3% | 7.5% | 30.4% | 27.1% | 45.3% | 52.0% | 32.7% | 65.1% | 32.4% |
| Return on capital employed | 11.8% | 7.5% | 12.0% | 1.7% | 7.6% | 3.4% | 9.6% | 19.1% | 18.2% | 20.8% | 9.6% |
| Operating margin | 15.3% | 9.2% | 14.0% | 1.9% | 8.4% | 4.7% | 12.5% | 14.3% | 14.4% | 15.4% | 12.5% |
| Net margin | 15.7% | 9.6% | 12.1% | 2.7% | 10.0% | 10.1% | 16.3% | 11.0% | 7.3% | 14.9% | 10.1% |
| Debt to equity | 1.68x | 1.83x | 2.22x | 2.10x | 2.38x | 2.63x | 2.60x | 2.54x | 2.56x | 2.24x | 2.24x |
| Current ratio | 0.96x | 1.04x | 0.96x | 0.92x | 0.88x | 0.98x | 1.02x | 1.29x | 1.33x | 1.21x | 0.98x |
| Cash conversion | 1.25x | 2.23x | 1.86x | 6.37x | 2.23x | 3.26x | 1.57x | 1.75x | 2.91x | 1.44x | 1.86x |
How it compares in technology
Among the 42 technology companies here measured on free cash flow, International Business Machines pays out less than 7 of them. The median for that group is 28.6%, against this company’s 51.7%.
Closest on free cash flow
- Cisco Systems (CSCO) 48.4%
- Automatic Data Processing (ADP) 50.1%
- Power Integrations (POWI) 54.1%
- Universal Display Corp \Pa\ (OLED) 55.4%
Same sector and same denominator, so the figures are comparable. All 46 in technology →