IBM Ratio Analysis case

Professor send paper to Turnitin, so please refrain from AI assistance. Due tomorrow night. These are the instructions :

Instructions

THIS IS AN INDIVIDUAL ASSIGNMENT

Explore ratios (Mergent or other resources) for the IBM case to answer the case question. Consider using competitor data / industry averages to better understand your ratios and findings. The amount of ratios and types of ratios are left up to you, but be sure to provide at least one ratio from each ratio category (see readings from text….profitability, liquidity, et al) available.  Make sure you have at least one ratio pertaining directly to capital structure (debt).

You must use the financials provided in the case to complete your calculations.

Page 1
9-100-032
REV. APRIL 18, 2002
________________________________________________________________________________________________________________
Professor David F. Hawkins prepared this case. This case was developed from published sources. HBS cases are developed solely as the basis for
class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective
management.
Copyright © 1999 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685,
write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be
reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical,
photocopying, recording, or otherwise—without the permission of Harvard Business School.
DAVID F. HAWKINS
International Business Machines Corporation (A)
There are a number of complex accounting principles I have never fully understood, in particular retiree
benefits and deferred tax accounting. This worries me now. These two topics are at the core of several issues
that have been raised about my favorite equity investment—IBM. I’m not sure if these developments are
positive or negative equity valuation considerations.
First on July 1 the company converted a portion of its defined benefit pension plan to a cash balance plan.
This move is expected to reduce IBM’s pension cost by $200 million a year. This change has not been well
received by a number of IBM employees.
Second, a well known hedge fund claims that IBM’s record 1998 earnings-per share was boosted by a one￾time deferred tax credit.
I need some help to evaluate how these two issues impact IBM’s obligations, quality of earnings, and future
net income. Also, while we are looking at IBM are there any other potential of earnings issues that I should be
concerned about?
—Chris Paget, private investor, during a conversation with her stockbroker
International Business Machines Corporation (“IBM”) was a leading global provider of computer
hardware and related products and services. For 1998, the company reported revenues of $81.7
billion—a record for the fourth consecutive year; while net income of $6.3 billion yielded a record
$6.57 earnings per common share—assuming dilution. The company funded investments of
approximately $20 billion in capital expenditures, research and development, strategic acquisitions
and repurchases of common stock.
Financial Statement Review
Before responding to her client’s request, Linda Luga, Chris Paget’s stockbroker, decided to
review the financial statements included in IBM’s 1998 Form 10-K filing with the Securities and
Exchange Commission (“SEC”). (See Exhibit 1.) her objective was to obtain a general understanding
of IBM’s recent operating performance and financial condition.
Question
1. Based on the financial statement data presented in Exhibit 1, what is your assessment of
IBM’s recent financial performance and financial condition?
For the exclusive use of M. Kyle, 2024.
This document is authorized for use only by Michael Kyle in MBA 623 Summer II taught by Caitlin Forehand, Walsh University from Jun 2024 to Aug 2024.
Page 2
100-032 International Business Machines Corporation (A)
2
Exhibit 1 xxx Selected Excerpts from International Business Machines Corporation’s 1996-
1998 Financial Statements Consolidated Statement of Earnings ($millions except per share
amounts)
For the year ended December 31, 1998 1997 1996
Revenue:
Hardware segment $35,419 $36,630 $36,634
Global Services segment 28,916 25,166 22,310
Software segment 11,863 11,164 11,426
Global Financing segment 2,877 2,806 3,054
Enterprise Investments segment/other 2,592 2,742 2,523
Total revenue 81,667 78,508 75,947
Cost:
Hardware segment 24,214 23,473 22,888
Global Services segment 21,125 18,464 16,270
Software segment 2,260 2,785 2,946
Global Financing segment 1,494 1,448 1,481
Enterprise Investments segment/other 1,702 1,729 1,823
Total cost 50,795 47,899 45,408
Gross profit 30,872 30,609 30,539
Operating expenses:
Selling, general and administrative 16,662 16,634 16,854
Research, development and engineering 5,046 4,877 5,089
Total operating expenses 21,708 21,511 21,943
Operating income 9,164 9,098 8,596
Other income, principally interest 589 657 707
Interest expense 713 728 716
Income before income taxes 9,040 9,027 8,587
Provision for income taxes 2,712 2,934 3,158
Net income 6,328 6,093 5,429
Preferred stock dividends 20 20 20
Net income applicable to common shareholders $ 6,308 $ 6,073 $ 5,409
Earnings per share of common stock—basic $ 6.75 $ 6.18 $ 5.12
Earnings per share of common stock—assuming dilution $ 6.57 $ 6.01 $ 5.01
For the exclusive use of M. Kyle, 2024.
This document is authorized for use only by Michael Kyle in MBA 623 Summer II taught by Caitlin Forehand, Walsh University from Jun 2024 to Aug 2024.
Page 3
International Business Machines Corporation (A) 100-032
3
Exhibit 1 (continued) xxx Consolidated Statement of Financial Position ($millions)
At December 31, 1998 1997 1996
Assets
Current assets:
Cash and cash equivalents $ 5,375 $ 7,106 $ 7,687
Marketable securities 393 447 450
Notes and accounts receivable—trade, net of allowances 18,958 16,850 16,515
Sales-type leases receivable 6,510 5,720 5,721
Other accounts receivable 1,313 1,256 931
Inventories 5,200 5,139 5,870
Prepaid expenses and other current assets 4,611 3,900 3,521
Total current assets 42,360 40,418 40,695
Plant, rental machines and other property 44,870 42,133 41,893
Less: Accumulated depreciation 25,239 23,786 24,486
Plant, rental machines and other property—net 19,631 18,347 17,407
Software, less accumulated amortization (1998-$12,516; 1997-$12,610) 599 819 1,435
Investment and sundry assets 23,510 21,915 21,595
Total assets $86,100 $81,499 $81,132
Liabilities and Stockholders’ Equity
Current liabilities:
Taxes $ 3,125 $ 2,381 3,029
Short-term debt 13,905 13,230 12,957
Accounts payable 6,252 5,215 4,767
Compensation and benefits 3,530 3,043 2,950
Deferred income 4,115 3,445 3,640
Other accrued expenses and liabilities 5,900 6,193 6,657
Total current liabilities 36,827 33,507 34,000
Long-term debt 15,508 13,696 9,872
Other liabilities 12,818 12,993 14,005
Deferred income taxes 1,514 1,487 1,627
Total liabilities 66,667 61,683 50,504
Stockholders’ equity:
Preferred stock, par value $.01 share 247 252 253
Shares authorized: 150,000,000
Shares issued (1998—2,546,011; 1997—2,597,261;
1996—2,610,711)
Common stock, par value $.50 per share 10,121 8,601 7,752
Shares authorized: 1,875,000,000
Shares issued (1998—926,869,052; 1997—969,015,351;
1996—1,018,141,084)
Retained earnings 10,141 11,010 11,189
Treasury stock, at cost (shares: 1998—962,146; 1997—923,955;
1996—2,199,066)
(133) (86) (135)
Employee benefits trust (shares: 1998-10,000,000; 1997-10,000,000) (1,854) (860)
Accumulated gains and losses not affecting retained earnings 911 899 168
Total stockholders’ equity 19,433 19,816 21,628
Total liabilities and stockholders’ equity $86,100 $81,499 $81,132
For the exclusive use of M. Kyle, 2024.
This document is authorized for use only by Michael Kyle in MBA 623 Summer II taught by Caitlin Forehand, Walsh University from Jun 2024 to Aug 2024.
Page 4
100-032 International Business Machines Corporation (A)
4
Exhibit 1 (continued) xxx Consolidated Statement of Cash Flows ($millions)
For the year ended December 31, 1998 1997 1996
Cash flow from operating activities:
Net income $ 6,328 $ 6,093 $ 5,429
Adjustments to reconcile net income to cash provided from
operating activities:
Depreciation 4,475 4,018 3,676
Amortization of software 517 983 1,336
Effect of restructuring charges (355) (445) (1,491)
Deferred income taxes (606) 358 11
Gain on disposition of fixed and other assets (261) (273) (300)
Other changes that (used) provided cash:
Receivables (2,736) (3,727) (650)
Inventories 73 432 196
Other assets 880 (1,087) (545)
Accounts payable 362 699 319
Other liabilities 596 1,814 2,294
Net cash provided from operating activities 9,273 8,865 10,275
Cash flow from investing activities:
Payments for plant, rental machines and other property (6,520) (6,793) (5,883)
Proceeds from disposition of plant, rental machines and
other property 905 1,130 1,314
Acquisition of Trivoli Systems, Inc. — — (716)
Investment in software (250) (314) (295)
Purchases of marketable securities and other investments (4,211) (1,617) (1,613)
Proceeds from marketable securities and other investments 3,945 1,439 1,470
Net cash used in investing activities (6,131) (6,155) (5,723)
Cash flow from financing activities:
Proceeds from new debt 7,567 9,142 7,670
Short-term borrowings less than 90 days—net 499 (668) (919)
Payments to settle debt (5,942) (4,530) (4,992)
Preferred stock transactions—net (5) (1) —
Common stock transactions—net (6,278) (6,250) (5,005)
Cash dividends paid (834) (783) (706)
Net cash used in financing activities (4,993) (3,090) (3,952)
Effect of exchange rate changes on cash and cash
equivalents 120 (201) (172)
Net cash in cash and cash equivalents (1,731) (581) 428
Cash and cash equivalents at January 1 7,106 7,687 7,259
Cash and cash equivalents at December 31 $ 5,375 $ 7,106 $ 7,687
Supplemental data:
Income taxes $ 1,929 $ 2,472 $ 2,229
Interest $1,605 $ 1,475 $ 1,563
For the exclusive use of M. Kyle, 2024.
This document is authorized for use only by Michael Kyle in MBA 623 Summer II taught by Caitlin Forehand, Walsh University from Jun 2024 to Aug 2024.
Page 5
100-032 -5-
Exhibit 1 (continued) Consolidated Statement of Stockholders’ Equity (dollars in millions)
Preferred
Stock
Common
Stock
Retained
Earning
Treasury
Stock
Employee
Benefits
Trust
Accumulated
Gains and Losses
Not Affecting
Retained Earnings Total
1996a
Stockholders’ equity, January 1, 1996 $253 $7,488 $11,630 $(41) $– $3,093 $22,423
Net income plus gains and losses not affecting retained earnings:
Net income 5,429 5,429
Gains and losses not affecting retained earnings (net of tax):
Foreign currency translation adjustments (net of tax expense of $19) (635) (635)
Net unrealized gains on marketable securities (net of tax expense of $71) 111 111
Total gains and losses not affecting retained earnings (524)
Subtotal: Net income plus gains and losses not affecting retained earnings $4,905
Cash dividends declared—common stock (686) (686)
Cash dividends declared—preferred stock (20) (20)
Common stock purchased and retired (97,951,400 shares) (710) (5,046) (5,756)
Common stock issued under employee plans (19,694,458 shares) 811 (13) 798
Purchases (8,914,332 shares) and sales (7,584,432 shares) of treasury stock under
employee plans—net (105) (94)
(199)
Tax effect—stock transactions 163 163
Stockholders’ equity, December 31, 1996 $253 $7,752 $11,189 $(135) $– $2,569 $21,628
1997a
Net income plus gains and losses not affecting retained earnings:
Net income $6,093 $6,093
Gains and losses not affecting retained earnings (net of tax):
Foreign currency translation adjustments (net of tax expense of $24) $(1,610) (1,610)
Net unrealized gains on marketable securities (net of tax expense of $37) (60) (60)
Total gains and losses not affecting retained earnings (1,670)
Subtotal: Net income plus gains and losses not affecting retained earnings $4,423
Cash dividends declared—common stock (763) (763)
Cash dividends declared—preferred stock (20) (20)
Common stock purchased and retired (68,777,336 shares) $ (565) (5,455) (6,200)
Preferred stock purchased and retired (13,450 shares) $ (1) (1)
Common stock issued under employee plans (19,651,603 shares) 985 (2) 983
Purchases (3,850,643 shares) and sales (5,105,754 shares) of treasury stock under
employee plans—net (32) $ 49
17
Tax effect—stock transactions 429 429
Stockholders’ equity, December 31, 1997 $252 $8,601 $11,010 $(86) $(860) $899 $19,816
For the exclusive use of M. Kyle, 2024.
This document is authorized for use only by Michael Kyle in MBA 623 Summer II taught by Caitlin Forehand, Walsh University from Jun 2024 to Aug 2024.
Page 6
100-032 -6-
Preferred
Stock
Common
Stock
Retained
Earning
Treasury
Stock
Employee
Benefits
Trust
Accumulated
Gains and Losses
Not Affecting
Retained Earnings Total
1998a
Net income plus gains and losses not affecting retained earnings:
Net income $6,328 $6,328
Gains and losses not affecting retained earnings (net of tax):
Foreign currency translation adjustments (net of tax expense of $45) $ 69 69
Net unrealized gains on marketable securities (net of tax expense of $36) (57) (57)
Total gains and losses not affecting retained earnings 12
Subtotal: Net income plus gains and losses not affecting retained earnings $6,340
Cash dividends declared—common stock (814) (814)
Cash dividends declared—preferred stock (20) (20)
Common stock purchased and retired (56,996,818 shares) $ (565) (6,291) (6,847)
Preferred stock purchased and retired (51,250 shares) $ (5) (5)
Common stock issued under employee plans (14,850,519 shares) 709 (1) 708
Purchases (4,163,057 shares) and sales (4,124,866 shares) of treasury stock under
employee plans—net (71) $ (47)
(118)
Fair value adjustment of employee benefits trust 1,002 $ (994) 8
Tax effect—stock transactions 365 365
Stockholders’ equity, December 31, 1998 $247 $10,121 $10,141 $(133) $(1,854) $911 $19,433
aReclassified to conform to 1998 presentation.
For the exclusive use of M. Kyle, 2024.
This document is authorized for use only by Michael Kyle in MBA 623 Summer II taught by Caitlin Forehand, Walsh University from Jun 2024 to Aug 2024.
Page 1
9-100-032
REV. APRIL 18, 2002
________________________________________________________________________________________________________________
Professor David F. Hawkins prepared this case. This case was developed from published sources. HBS cases are developed solely as the basis for
class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective
management.
Copyright © 1999 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685,
write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be
reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical,
photocopying, recording, or otherwise—without the permission of Harvard Business School.
DAVID F. HAWKINS
International Business Machines Corporation (A)
There are a number of complex accounting principles I have never fully understood, in particular retiree
benefits and deferred tax accounting. This worries me now. These two topics are at the core of several issues
that have been raised about my favorite equity investment—IBM. I’m not sure if these developments are
positive or negative equity valuation considerations.
First on July 1 the company converted a portion of its defined benefit pension plan to a cash balance plan.
This move is expected to reduce IBM’s pension cost by $200 million a year. This change has not been well
received by a number of IBM employees.
Second, a well known hedge fund claims that IBM’s record 1998 earnings-per share was boosted by a one￾time deferred tax credit.
I need some help to evaluate how these two issues impact IBM’s obligations, quality of earnings, and future
net income. Also, while we are looking at IBM are there any other potential of earnings issues that I should be
concerned about?
—Chris Paget, private investor, during a conversation with her stockbroker
International Business Machines Corporation (“IBM”) was a leading global provider of computer
hardware and related products and services. For 1998, the company reported revenues of $81.7
billion—a record for the fourth consecutive year; while net income of $6.3 billion yielded a record
$6.57 earnings per common share—assuming dilution. The company funded investments of
approximately $20 billion in capital expenditures, research and development, strategic acquisitions
and repurchases of common stock.
Financial Statement Review
Before responding to her client’s request, Linda Luga, Chris Paget’s stockbroker, decided to
review the financial statements included in IBM’s 1998 Form 10-K filing with the Securities and
Exchange Commission (“SEC”). (See Exhibit 1.) her objective was to obtain a general understanding
of IBM’s recent operating performance and financial condition.
Question
1. Based on the financial statement data presented in Exhibit 1, what is your assessment of
IBM’s recent financial performance and financial condition?
For the exclusive use of M. Kyle, 2024.
This document is authorized for use only by Michael Kyle in MBA 623 Summer II taught by Caitlin Forehand, Walsh University from Jun 2024 to Aug 2024.
Page 2
100-032 International Business Machines Corporation (A)
2
Exhibit 1 xxx Selected Excerpts from International Business Machines Corporation’s 1996-
1998 Financial Statements Consolidated Statement of Earnings ($millions except per share
amounts)
For the year ended December 31, 1998 1997 1996
Revenue:
Hardware segment $35,419 $36,630 $36,634
Global Services segment 28,916 25,166 22,310
Software segment 11,863 11,164 11,426
Global Financing segment 2,877 2,806 3,054
Enterprise Investments segment/other 2,592 2,742 2,523
Total revenue 81,667 78,508 75,947
Cost:
Hardware segment 24,214 23,473 22,888
Global Services segment 21,125 18,464 16,270
Software segment 2,260 2,785 2,946
Global Financing segment 1,494 1,448 1,481
Enterprise Investments segment/other 1,702 1,729 1,823
Total cost 50,795 47,899 45,408
Gross profit 30,872 30,609 30,539
Operating expenses:
Selling, general and administrative 16,662 16,634 16,854
Research, development and engineering 5,046 4,877 5,089
Total operating expenses 21,708 21,511 21,943
Operating income 9,164 9,098 8,596
Other income, principally interest 589 657 707
Interest expense 713 728 716
Income before income taxes 9,040 9,027 8,587
Provision for income taxes 2,712 2,934 3,158
Net income 6,328 6,093 5,429
Preferred stock dividends 20 20 20
Net income applicable to common shareholders $ 6,308 $ 6,073 $ 5,409
Earnings per share of common stock—basic $ 6.75 $ 6.18 $ 5.12
Earnings per share of common stock—assuming dilution $ 6.57 $ 6.01 $ 5.01
For the exclusive use of M. Kyle, 2024.
This document is authorized for use only by Michael Kyle in MBA 623 Summer II taught by Caitlin Forehand, Walsh University from Jun 2024 to Aug 2024.
Page 3
International Business Machines Corporation (A) 100-032
3
Exhibit 1 (continued) xxx Consolidated Statement of Financial Position ($millions)
At December 31, 1998 1997 1996
Assets
Current assets:
Cash and cash equivalents $ 5,375 $ 7,106 $ 7,687
Marketable securities 393 447 450
Notes and accounts receivable—trade, net of allowances 18,958 16,850 16,515
Sales-type leases receivable 6,510 5,720 5,721
Other accounts receivable 1,313 1,256 931
Inventories 5,200 5,139 5,870
Prepaid expenses and other current assets 4,611 3,900 3,521
Total current assets 42,360 40,418 40,695
Plant, rental machines and other property 44,870 42,133 41,893
Less: Accumulated depreciation 25,239 23,786 24,486
Plant, rental machines and other property—net 19,631 18,347 17,407
Software, less accumulated amortization (1998-$12,516; 1997-$12,610) 599 819 1,435
Investment and sundry assets 23,510 21,915 21,595
Total assets $86,100 $81,499 $81,132
Liabilities and Stockholders’ Equity
Current liabilities:
Taxes $ 3,125 $ 2,381 3,029
Short-term debt 13,905 13,230 12,957
Accounts payable 6,252 5,215 4,767
Compensation and benefits 3,530 3,043 2,950
Deferred income 4,115 3,445 3,640
Other accrued expenses and liabilities 5,900 6,193 6,657
Total current liabilities 36,827 33,507 34,000
Long-term debt 15,508 13,696 9,872
Other liabilities 12,818 12,993 14,005
Deferred income taxes 1,514 1,487 1,627
Total liabilities 66,667 61,683 50,504
Stockholders’ equity:
Preferred stock, par value $.01 share 247 252 253
Shares authorized: 150,000,000
Shares issued (1998—2,546,011; 1997—2,597,261;
1996—2,610,711)
Common stock, par value $.50 per share 10,121 8,601 7,752
Shares authorized: 1,875,000,000
Shares issued (1998—926,869,052; 1997—969,015,351;
1996—1,018,141,084)
Retained earnings 10,141 11,010 11,189
Treasury stock, at cost (shares: 1998—962,146; 1997—923,955;
1996—2,199,066)
(133) (86) (135)
Employee benefits trust (shares: 1998-10,000,000; 1997-10,000,000) (1,854) (860)
Accumulated gains and losses not affecting retained earnings 911 899 168
Total stockholders’ equity 19,433 19,816 21,628
Total liabilities and stockholders’ equity $86,100 $81,499 $81,132
For the exclusive use of M. Kyle, 2024.
This document is authorized for use only by Michael Kyle in MBA 623 Summer II taught by Caitlin Forehand, Walsh University from Jun 2024 to Aug 2024.
Page 4
100-032 International Business Machines Corporation (A)
4
Exhibit 1 (continued) xxx Consolidated Statement of Cash Flows ($millions)
For the year ended December 31, 1998 1997 1996
Cash flow from operating activities:
Net income $ 6,328 $ 6,093 $ 5,429
Adjustments to reconcile net income to cash provided from
operating activities:
Depreciation 4,475 4,018 3,676
Amortization of software 517 983 1,336
Effect of restructuring charges (355) (445) (1,491)
Deferred income taxes (606) 358 11
Gain on disposition of fixed and other assets (261) (273) (300)
Other changes that (used) provided cash:
Receivables (2,736) (3,727) (650)
Inventories 73 432 196
Other assets 880 (1,087) (545)
Accounts payable 362 699 319
Other liabilities 596 1,814 2,294
Net cash provided from operating activities 9,273 8,865 10,275
Cash flow from investing activities:
Payments for plant, rental machines and other property (6,520) (6,793) (5,883)
Proceeds from disposition of plant, rental machines and
other property 905 1,130 1,314
Acquisition of Trivoli Systems, Inc. — — (716)
Investment in software (250) (314) (295)
Purchases of marketable securities and other investments (4,211) (1,617) (1,613)
Proceeds from marketable securities and other investments 3,945 1,439 1,470
Net cash used in investing activities (6,131) (6,155) (5,723)
Cash flow from financing activities:
Proceeds from new debt 7,567 9,142 7,670
Short-term borrowings less than 90 days—net 499 (668) (919)
Payments to settle debt (5,942) (4,530) (4,992)
Preferred stock transactions—net (5) (1) —
Common stock transactions—net (6,278) (6,250) (5,005)
Cash dividends paid (834) (783) (706)
Net cash used in financing activities (4,993) (3,090) (3,952)
Effect of exchange rate changes on cash and cash
equivalents 120 (201) (172)
Net cash in cash and cash equivalents (1,731) (581) 428
Cash and cash equivalents at January 1 7,106 7,687 7,259
Cash and cash equivalents at December 31 $ 5,375 $ 7,106 $ 7,687
Supplemental data:
Income taxes $ 1,929 $ 2,472 $ 2,229
Interest $1,605 $ 1,475 $ 1,563
For the exclusive use of M. Kyle, 2024.
This document is authorized for use only by Michael Kyle in MBA 623 Summer II taught by Caitlin Forehand, Walsh University from Jun 2024 to Aug 2024.
Page 5
100-032 -5-
Exhibit 1 (continued) Consolidated Statement of Stockholders’ Equity (dollars in millions)
Preferred
Stock
Common
Stock
Retained
Earning
Treasury
Stock
Employee
Benefits
Trust
Accumulated
Gains and Losses
Not Affecting
Retained Earnings Total
1996a
Stockholders’ equity, January 1, 1996 $253 $7,488 $11,630 $(41) $– $3,093 $22,423
Net income plus gains and losses not affecting retained earnings:
Net income 5,429 5,429
Gains and losses not affecting retained earnings (net of tax):
Foreign currency translation adjustments (net of tax expense of $19) (635) (635)
Net unrealized gains on marketable securities (net of tax expense of $71) 111 111
Total gains and losses not affecting retained earnings (524)
Subtotal: Net income plus gains and losses not affecting retained earnings $4,905
Cash dividends declared—common stock (686) (686)
Cash dividends declared—preferred stock (20) (20)
Common stock purchased and retired (97,951,400 shares) (710) (5,046) (5,756)
Common stock issued under employee plans (19,694,458 shares) 811 (13) 798
Purchases (8,914,332 shares) and sales (7,584,432 shares) of treasury stock under
employee plans—net (105) (94)
(199)
Tax effect—stock transactions 163 163
Stockholders’ equity, December 31, 1996 $253 $7,752 $11,189 $(135) $– $2,569 $21,628
1997a
Net income plus gains and losses not affecting retained earnings:
Net income $6,093 $6,093
Gains and losses not affecting retained earnings (net of tax):
Foreign currency translation adjustments (net of tax expense of $24) $(1,610) (1,610)
Net unrealized gains on marketable securities (net of tax expense of $37) (60) (60)
Total gains and losses not affecting retained earnings (1,670)
Subtotal: Net income plus gains and losses not affecting retained earnings $4,423
Cash dividends declared—common stock (763) (763)
Cash dividends declared—preferred stock (20) (20)
Common stock purchased and retired (68,777,336 shares) $ (565) (5,455) (6,200)
Preferred stock purchased and retired (13,450 shares) $ (1) (1)
Common stock issued under employee plans (19,651,603 shares) 985 (2) 983
Purchases (3,850,643 shares) and sales (5,105,754 shares) of treasury stock under
employee plans—net (32) $ 49
17
Tax effect—stock transactions 429 429
Stockholders’ equity, December 31, 1997 $252 $8,601 $11,010 $(86) $(860) $899 $19,816
For the exclusive use of M. Kyle, 2024.
This document is authorized for use only by Michael Kyle in MBA 623 Summer II taught by Caitlin Forehand, Walsh University from Jun 2024 to Aug 2024.
Page 6
100-032 -6-
Preferred
Stock
Common
Stock
Retained
Earning
Treasury
Stock
Employee
Benefits
Trust
Accumulated
Gains and Losses
Not Affecting
Retained Earnings Total
1998a
Net income plus gains and losses not affecting retained earnings:
Net income $6,328 $6,328
Gains and losses not affecting retained earnings (net of tax):
Foreign currency translation adjustments (net of tax expense of $45) $ 69 69
Net unrealized gains on marketable securities (net of tax expense of $36) (57) (57)
Total gains and losses not affecting retained earnings 12
Subtotal: Net income plus gains and losses not affecting retained earnings $6,340
Cash dividends declared—common stock (814) (814)
Cash dividends declared—preferred stock (20) (20)
Common stock purchased and retired (56,996,818 shares) $ (565) (6,291) (6,847)
Preferred stock purchased and retired (51,250 shares) $ (5) (5)
Common stock issued under employee plans (14,850,519 shares) 709 (1) 708
Purchases (4,163,057 shares) and sales (4,124,866 shares) of treasury stock under
employee plans—net (71) $ (47)
(118)
Fair value adjustment of employee benefits trust 1,002 $ (994) 8
Tax effect—stock transactions 365 365
Stockholders’ equity, December 31, 1998 $247 $10,121 $10,141 $(133) $(1,854) $911 $19,433
aReclassified to conform to 1998 presentation.
For the exclusive use of M. Kyle, 2024.
This document is authorized for use only by Michael Kyle in MBA 623 Summer II taught by Caitlin Forehand, Walsh University from Jun 2024 to Aug 2024.
Page 1
Writing Rubric
Criterion Not Acceptable Needs
Improvement Satisfactory Exemplary Score*
Organization
& Coherence
Unorganized and
incoherent.
The paper is
weak in
organization
and/or
coherence. The
reader cannot
identify a line of
reasoning.
The paper is
generally
organized and
coherent. The
reader can mostly
follow the line of
reasoning.
The paper is well
organized and
coherent
throughout. The
reader can follow
the line of
reasoning.
Professional
Tone/Voice
Tone and voice
are inappropriate
throughout.
Frequent lapses
in tone and voice.
The writing does
not engage the
reader.
Tone and voice
are generally
appropriate with
only minor
lapses.
Tone and voice
are professional
and consistently
appropriate
throughout.
Presentation
of Ideas
Lacking in flow
of thoughts and
ideas.
Minimal flow of
thoughts and
ideas.
Flow of thoughts
and ideas is
generally
consistent.
Flow of thoughts
and ideas is
consistent
throughout.
Word Choice
Word choice is
confusing,
unclear and/or
inappropriate.
Word choice is
poor and/or
inappropriate.
Word choice is
generally clear,
concise and
appropriate.
Word choice is
accurate, clear,
concise and
appropriate
throughout.
Sentence
Structure
Sentences are
fragmented and
incomplete.
Several sentences
are constructed
incorrectly.
Most sentences
are well phrased,
clear and varied.
Sentences are
well phrased,
clear and varied
throughout.
Grammar &
Spelling
No attention
given to grammar
and spelling.
Errors are
frequent and
distracting.
Minor errors are
apparent but do
not detract from
or obscure
meaning.
Writing is error
free throughout.
Punctuation
&
Capitalization
No attention
given to
punctuation and
capitalization.
Errors are
frequent and
distracting.
Minor errors are
apparent but do
not detract from
or obscure
meaning.
Writing is error
free throughout.
Format
(Length,
Report,
Essay, APA)
No apparent
format.
Inappropriate
format and/or
frequent
inconsistency in
application.
Writing is error
free throughout.
Appropriate
format but with
minor
inconsistencies in
application.
Appropriate
format
consistently
applied and
artifact within
assigned page
length.