Evaluate ibms earnings per share

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Reference no: EM13487062

In the seven years (since 1994), that Lou Gerstner has reigned over IBM, the company's earnings per share have increased an average of 27% per year. This remarkable increase in earnings, has not gone unnoticed by the securities markets. Indeed, the company's market value has grown from less than $30 billion to over $200 billion during this period.

Use the following financial statement data to:

1. Decompose IBM's ROE and discuss the factors (and trends) that contribute to Big Blue's profitability
2. Evaluate IBM's Revenue growth, Receivables, and Gross margins and over the period (be sure to control for seasonality in your evaluation)
3. Evaluate IBM's Earnings per Share (basic), and Identify the factors most responsible for the increase in IBM's earnings

Write your answers in standard English. Be specific in your references, provide details of your computations, and be thorough in your explanations.

 

Reference no: EM13487062

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