Financial analysis for IBM
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Recommendations and justifications for IBM International Business Machines. NO copying and PASTING from sites. Please make sure you include justifications for your recommendations. Any reference in APA.
1. RECOMMENDATION #1: Should the firm increase their capital expenditures to increase competitiveness? This will almost always be true but what segments of the business get the most capital allocated to them and why?
2. RECOMMENDATION #2: Should the firm increase growth by acquiring other companies for synergies or grow internally? Do they have the infrastructure to grow internally? If they get acquired by a competitor, how will the merger be integrated in regards to culture, overlapping businesses, etc.
3. RECOMMENDATION #3: Should the firm risk increasing their leverage (debt) to increase earnings and return on capital or keep the leverage the same (or even decrease it). If so, why and by how much.
4. RECOMMENDATION #4: Should they increase marketing spending? If so, by how much and where should it be allocated. Should online marketing spending and international marketing increase by more than print ads? Justify any additional spending that is recommended.
5. RECOMMENDATION #5: Should the firm increase/decrease R&D spending? If so, by how much. At what level do you feel your chose firm would be spending too much on R&D.
6. RECOMMENDATION #6: How should they go about controlling costs including labor, health care, and pension liabilities? (GM and Ford need help in this department).
7. RECOMMENDATION #7: Should the firm expand overseas? If so, which markets should be focused on first and why?
CONCLUDING THOUGHTS ON THE FUTURE OF YOUR CHOSEN COMPANY
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Solution Summary
The expert examines financial analysis for IBM international business machines. The response address the query posted in 1022 words with APA References.
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// I have included future of the company content in the work//
The response address the query posted in 1022 words with APA References
//IBM International Business Machines is engaged in the business of information technology products and services. In the next paragraphs, there will be a discussion of the increase in capital expenditure to face competition in the market. There will be discussion over importance of merger and acquisition to get the benefit of synergy for increasing the overall profitability. There will also be a discussion over business risk in terms of leverage and return on capital to estimate the impact of debt on the overall performance.//
Answer 1
The company needs to expend more capital expenditure to increase the competitiveness in the field of information technology regarding social, data analysis, cloud, and mobile. The expansion of investment in the field of information technology will provide a base to expand its marketplace in different countries, especially in developing countries. It will increase its revenue and marketplaces at international level with high profitability and growth for long time survival.
Global Technology Services segment and Systems and Software segment should get the most of the capital allocation because these two segments have scope in developing countries to expand the business activities. The developing countries need services and products of these two segments that mean a lot of scope for expanding the marketplace. The expansion of the business activities in developing countries improves profitability and growth of the company (IBM Annual Report, 2014).
Answer 2
On the basis of the past and current strategies of the company for the growth in the market, ...
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- BBA, University of Rajasthan
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