International Business Bonds

IBM
 Stock
  

USD 138.62  0.45  0.32%   

International Business' financial leverage is the degree to which the firm utilizes its fixed-income securities and uses equity to finance projects. Companies with high leverage are usually considered to be at financial risk. International Business' financial risk is the risk to International Business stockholders that is caused by an increase in debt. In other words, with a high degree of financial leverage come high-interest payments, which usually reduce Earnings Per Share (EPS).
Please see the analysis of International Business Fundamentals Over Time.
  
International Business Total Debt is relatively stable at the moment as compared to the past year. The company's current value of Total Debt is estimated at 55.76 Billion. Debt Current is expected to hike to about 8.7 B this year, although the value of Issuance Repayment of Debt Securities will most likely fall to (8.3 B).

International Current Financial Burden

International Business' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. International Business' cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the company is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps International Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect International Business' stakeholders.

Asset vs Debt

Equity vs Debt

For most companies, including International Business, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for the executing running International Business Machines the most critical issue when dealing with liquidity needs is whether the current assets are properly aligned with its current liabilities. If not, management will need to obtain alternative financing to ensure that there are always enough cash equivalents on the balance sheet in reserve to pay for obligations.
Price Book
6.35
Book Value
21.49
Operating Margin
0.11
Profit Margin
0.0936
Return On Assets
0.03
Return On Equity
0.27
Given that International Business' debt-to-equity ratio measures a company's obligations relative to the value of its net assets, it is usually used by traders to estimate the extent to which International Business is acquiring new debt as a mechanism of leveraging its assets. A high debt-to-equity ratio is generally associated with increased risk, implying that it has been aggressive in financing its growth with debt. Another way to look at debt-to-equity ratios is to compare the overall debt load of International Business to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, International Business is said to be less leveraged. If creditors hold a majority of International Business' assets, the company is said to be highly leveraged.

International Business Quarterly Debt to Equity Ratio

5.566

Given the importance of International Business' capital structure, the first step in the capital decision process is for the management of International Business to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of International Business Machines to issue bonds at a reasonable cost.

International Business Bond Ratings

International Business Machines bond ratings play a critical role in determining how much International Business have to pay to access credit markets, i.e., the amount of interest on their issued debt. The threshold between investment-grade and speculative-grade ratings has important market implications for International Business' borrowing costs.
Piotroski F Score
8  Strong
Beneish M Score

International Business Debt to Cash Allocation

As International Business Machines follows its natural business cycle, the capital allocation decisions will not magically go away. International Business' decision-makers have to determine if most of the cash flows will be poured back into or reinvested in the business, reserved for other projects beyond operational needs, or paid back to stakeholders and investors. Many companies eventually find out that there is only so much market out there to be conquered, and adding the next product or service is only half as profitable per unit as their current endeavors. Eventually, the company will reach a point where cash flows are strong, and extra cash is available but not fully utilized. In this case, the company may start buying back its stock from the public or issue more dividends.
The company has 53.38 B in debt with debt to equity (D/E) ratio of 2.74, meaning that the company heavily relies on borrowing funds for operations. International Business has a current ratio of 0.86, suggesting that it has not enough short term capital to pay financial commitments when the payables are due. Debt can assist International Business until it has trouble settling it off, either with new capital or with free cash flow. So, International Business' shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like International Business sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for International to invest in growth at high rates of return. When we think about International Business' use of debt, we should always consider it together with cash and equity.

International Business Inventories Over Time

International Business Assets Financed by Debt

The debt-to-assets ratio shows the degree to which International Business uses debt to finance its assets. It includes both long-term and short-term borrowings maturing within one year. It also includes both tangible and intangible assets, such as goodwill.

International Business Debt Ratio

    
  39.01   
It appears without question that nearly 60% of International Business' assets are financed through equity. Typically, companies with high debt-to-asset ratios are said to be highly leveraged. The higher the ratio, the greater risk will be associated with the International Business' operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of International Business, which in turn will lower the firm's financial flexibility. Like all other financial ratios, an International Business debt ratio should be compared their industry average or other competing firms.
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International Business Corporate Bonds Issued

International Business issues bonds to finance its operations. Corporate bonds make up one of the most significant components of the U.S. bond market and are considered the world's largest securities market. International Business uses the proceeds from bond sales for a wide variety of purposes, including financing ongoing mergers and acquisitions, buying new equipment, investing in research and development, buying back their own stock, paying dividends to shareholders, and even refinancing existing debt. Most International bonds can be classified according to their maturity, which is the date when International Business Machines has to pay back the principal to investors. Maturities can be short-term, medium-term, or long-term (more than ten years). Longer-term bonds usually offer higher interest rates but may entail additional risks.

International Business Historical Liabilities

While analyzing the current debt level is an essential aspect of forecasting the current year budgeting needs of International Business, understanding its historical liability is critical in projecting International Business' future earnings, especially during periods of low and high inflation and deflation. Many analysts look at the trend in assets and liabilities and evaluate how International Business uses its financing power over time.
In order to fund their growth, businesses such as International Business widely use Financial Leverage. For most companies, financial capital is raised by issuing debt securities and by selling common stock. The debt and equity that make up International Business' capital structure have many risks and return implications. Leverage is an investment strategy of using borrowed money to increase the potential return of an investment. Please note, the concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.

Understaning International Business Use of Financial Leverage

International Business financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures International Business's total debt position, including all of outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of International Business assets, the company is considered highly leveraged. Understanding the composition and structure of overall International Business debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business and if it is worth investing in it.
Last ReportedProjected for 2022
Total Debt55.1 B55.8 B
Debt Current7.8 B8.7 B
Debt Non Current47.4 B47.1 B
Issuance Repayment of Debt Securities-8.1 B-8.3 B
Long Term Debt to Equity 2.38  2.09 
Debt to Equity Ratio 5.98  6.67 
Please read more on our technical analysis page.

International Business Investors Sentiment

The influence of International Business' investor sentiment on the probability of its price appreciation or decline could be a good factor in your decision-making process regarding taking a position in International. The overall investor sentiment generally increases the direction of a stock movement in a one-year investment horizon. However, the impact of investor sentiment on the entire stock markets does not have a solid backing from leading economists and market statisticians.
Investor biases related to International Business' public news can be used to forecast risks associated with investment in International. The trend in average sentiment can be used to explain how an investor holding International can time the market purely based on public headlines and social activities around International Business Machines. Please note that most equiteis that are difficult to arbitrage are affected by market sentiment the most.
International Business' market sentiment shows the aggregated news analyzed to detect positive and negative mentions from the text and comments. The data is normalized to provide daily scores for International Business' and other traded tickers. The bigger the bubble, the more accurate is the estimated score. Higher bars for a given day show more participation in the average International Business' news discussions. The higher the estimated score, the more favorable is the investor's outlook on International Business.

International Business Implied Volatility

    
  36.3  
International Business' implied volatility exposes the market's sentiment of International Business Machines stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if International Business' implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that International Business stock will not fluctuate a lot when International Business' options are near their expiration.
Some investors attempt to determine whether the market's mood is bullish or bearish by monitoring changes in market sentiment. Unlike more traditional methods such as technical analysis, investor sentiment usually refers to the aggregate attitude towards International Business in the overall investment community. So, suppose investors can accurately measure the market's sentiment. In that case, they can use it for their benefit. For example, some tools to gauge market sentiment could be utilized using contrarian indexes, International Business' short interest history, or implied volatility extrapolated from International Business options trading.

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Please see the analysis of International Business Fundamentals Over Time. Note that the International Business information on this page should be used as a complementary analysis to other International Business' statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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When running International Business price analysis, check to measure International Business' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy International Business is operating at the current time. Most of International Business' value examination focuses on studying past and present price action to predict the probability of International Business' future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move International Business' price. Additionally, you may evaluate how the addition of International Business to your portfolios can decrease your overall portfolio volatility.
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Is International Business' industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of International Business. If investors know International will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about International Business listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
0.041
Market Capitalization
123.5 B
Quarterly Revenue Growth YOY
0.093
Return On Assets
0.03
Return On Equity
0.27
The market value of International Business is measured differently than its book value, which is the value of International that is recorded on the company's balance sheet. Investors also form their own opinion of International Business' value that differs from its market value or its book value, called intrinsic value, which is International Business' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because International Business' market value can be influenced by many factors that don't directly affect International Business' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between International Business' value and its price as these two are different measures arrived at by different means. Investors typically determine International Business value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, International Business' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

What is Financial Leverage?

Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.

Leverage and Capital Costs

The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.

Benefits of Financial Leverage

Leverage provides the following benefits for companies:
  • Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
  • It provides a variety of financing sources by which the firm can achieve its target earnings.
  • Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.
By borrowing funds, the firm incurs a debt that must be paid. But, this debt is paid in small installments over a relatively long period of time. This frees funds for more immediate use in the stock market. For example, suppose a company can afford a new factory but will be left with negligible free cash. In that case, it may be better to finance the factory and spend the cash on hand on inputs, labor, or even hold a significant portion as a reserve against unforeseen circumstances.

The Risk of Financial Leverage

The most obvious and apparent risk of leverage is that if price changes unexpectedly, the leveraged position can lead to severe losses. For example, imagine a hedge fund seeded by $50 worth of investor money. The hedge fund borrows another $50 and buys an asset worth $100, leading to a leverage ratio of 2:1. For the investor, this is neither good nor bad -- until the asset price changes. If the asset price goes up 10 percent, the investor earns $10 on $50 of capital, a net gain of 20 percent, and is very pleased with the increased gains from the leverage. However, if the asset price crashes unexpectedly, say by 30 percent, the investor loses $30 on $50 of capital, suffering a 60 percent loss. In other words, the effect of leverage is to increase the volatility of returns and increase the effects of a price change on the asset to the bottom line while increasing the chance for profit as well.