Question

Competencies

Analyze the role of accounting in business operations.
Apply the principles of accrual accounting and accounting cycles.
Appraise the financial health and performance of a company.

Analyze cost behaviors and production costing methods.
Employ accounting data for business analysis and prediction.
Evaluate accounting-related legal and ethical business implications.
Student Success Criteria

View the grading rubric for this deliverable by selecting the “This item is graded with a rubric” link, which is located in the Details & Information pane.

Scenario

The Vice President of Finance called you into a meeting to discuss the overall vision and future of your company. He states that he has always admired International Business Machines (IBM) since he studied the company in college. The VP has not followed the company as of late and would like you to prepare an update as to how IBM is doing over last three years and the top line outlook for next year. The VP would like you to use similar techniques that you have used in writing your previous reports.
Instructions

Using the financial statements of International Business Machines Corporation:
Prepare an income statement vertical and horizontal analysis of International Business Machines Corporation using three years of data. Use Mergent Market Atlas to download the most current income statement data to Excel, financial year ended 2023.
Be sure to search for International Business Machines Corp and choose the United States entity. FAQ for accessing and downloading income statements

Using the line item descriptions from the income statement, create a new tab and identify which expenses (costs) are likely fixed, variable, product, and period costs.

Using Mergent Market Atlas, in a new tab, create a ratio analysis report showing International Business Machines Corporation and its largest 4 competitors based on total revenue
Download the financial ratios for IBM and four (4) specific competitors into Excel. The competitor companies are: Dell Technologies Inc (DELL), General Dynamics Corp (GC), Intel Corp (INTC), and Microsoft Corporation (MSFT). Format and arrange the data for the following in a professional manner:
Gross Margin
Operating Margin
Net Profit Margin
Quick Ratio
Current Ratio
Total Inventory as % of Total Assets
Total Current Assets as % of Total Assets
Property/Plant/Equipment, Total – Net as % of Total Assets
Research & Development Expenses as % of Total Revenue
Selling / General / Admin Expenses as % of Total Revenue

Note: Not all of the above ratios are available in Mergent Market Atlas, some will require you to gather the data and perform the calculations.

4. Using all of the historical income statement data available for IBM, in a new tab prepare a Total Revenue forecast for the upcoming year including your assumptions, calculations, and rationale.

5. Using the SEC.gov website, find articles on of International Business Machines Corporation and comment in a Word document on any recent accounting standards or ethical considerations that affect the company.
Note: you must use Excel to perform all of your calculations, manual data entry will Not be accepted.You should submit one Excel Workbook with all worksheets (tabs) required, plus, one Word document for your narrative.

Save your assignment as Microsoft Excel and Word files. (Mac users, please remember to append the “.xlsx” and “.docx” extension to the filename.) The name of the file should be your first initial and last name, followed by an underscore and the name of the assignment, and an underscore and the date (yyyy-mm-dd). An example is shown below:
Jstudent_AssignmentName_2024-06-25
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