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DWarning

International Business Machines(IBM)

D

Financial data as of Dec 31, 2025Declining · Technology

FCF Margin17.0%Free Cash Flow / Revenue
Cash Conversion124.5%Operating CF / Net Income
Free Cash Flow$11.5B
Revenue$67.5B
Net Cash-$51.0BNet debt position
Debt / FCF5.6xElevated debt burden
Current Ratio0.96Tight short-term liquidity
YoY FCF Growth-10.3%5 of 5 quarters positive

How This Grade Was Calculated

Base grade from FCF margin, adjusted by financial health factors

BaseC
→
-0.5Elevated debt-to-FCF ratio (5.6x)
→
+0.5Healthy FCF margin with manageable debt (17.0%, 5.6x)
→
-1Current ratio below 1.0 (0.96)
→
-0.5Moderate decline but healthy margin (-10.3% YoY)
→
FinalD

Analysis Summary

Strengths

  • Strong FCF margin (17.0%)
  • Excellent cash conversion (125%)

Concerns

  • Heavy debt position ($51.0B net debt, 5.6x FCF)
  • High debt-to-FCF ratio (5.6x)
  • Current ratio below 1.0 — tight short-term liquidity
  • FCF trend declining (-10.3% YoY) but margin still healthy

Financial Breakdown

Key financials compared side by side

Margin Composition

FCF Margin17.0%
Net Margin15.7%
Operating CF Margin19.5%
CapEx Ratio2.6%

Balance Sheet Health

Debt, liquidity, and leverage snapshot

Net Cash-$51.0BNet debt position
Debt / FCF5.6xElevated debt burden
Current Ratio0.96Tight liquidity
Debt / Equity1.98Moderate leverage

Quarterly FCF Trend

-10.3% YoYDeclining (-10.3%)

Free cash flow per quarter

Sector Comparison — Technology

FCF Margin ranked against sector peers

View all →

Detailed Metrics

Company NameInternational Business Machines
SectorTechnology
Free Cash Flow$11.5B
Revenue$67.5B
Net Income$10.6B
Operating Cash Flow$13.2B
Capital Expenditure$1.7B
FCF Margin17.0%
Cash Conversion Rate124.5%
Net Margin15.7%
Total Debt$64.6B
Total Cash$13.6B
Net Cash-$51.0B
Current Ratio0.96
Debt / Equity1.98
Debt / FCF5.6x
YoY FCF Growth-10.3%
Positive Quarters5 of 5
Trend DirectionDeclining
Report DateDec 31, 2025
GradeD
Data SourceYahoo Finance