IBM Projected Financial Statements
Income Statement
IBM has five reporting segments namely: Technology services and cloud platform, Global Business Services, Cognitive Solutions, Systems hardware and Global financing (IBM). The assumptions of the projected income statement are as follows:
Technology services and cloud platform that accounts for 44.92% of all revenue is projected to grow at 14% as more businesses sign up for the service, and an increase in the services through partners such as VMware and GitHub
Global Business Services that accounts for 22.46% of all revenue is projected to grow at 8% as the business shifts its focus to cloud, analytics, security, and mobile (IBM)
Cognitive solutions that accounts for 21.39% of all revenue is projected to grow at 12% driven by security analytics including Watson and Truven solutions (IBM)
Systems and Hardware that accounts for 9.09% of total revenue will is projected to decline as the business shifts focus from low margin Systems and Hardware to focus on high margin products.
Global financing that accounts for 2.14% of the total revenue is projected to grow at 3%, with the customer participation and interest rates expected to remain constant, the driver for growth will be an increase in new customers. Therefore, IBM is projected to have a weighted growth rate of 10.53% in 2016.
All income statements items vary with sales, except for the dividend payout ratio that is projected to remain constant at the current payout ratio of 37.13%.
Balance Sheet
All current assets, deferred income tax, accounts payables, taxes payable, accrued liabilities, and deferred revenue vary with sales.
The business generates more finance than is required to finance the increase in total assets from $110,495 to $116,654. Consequently, the business opts to repay $6,058 of short-term debt.
Plant Property and Equipment will increase by 5%
Stockholder equity will remain constant except for the increase in retained earnings by $9,288.
Cash Flow
Other income/(expenses) is the balancing figure that reconciles the cash flow closing balance with the balance sheet cash balance.
Works Cited
IBM,. "Downloads | 2015 IBM Annual Report". 2015 IBM Annual Report. N.p., 2016. Web. 14
June 2016.
