IBM looks to pandemic and post-Brexit fallout, sees nothing but money-making opportunities IBM reckons both the pandemic and Brexit could play to its strengths in 2021 – making a claim about turning threats into opportunity in the latest profit and loss accounts filed for its loss-making UK operation. According to the financial document for the year ended 31 December 2020 [PDF] - filed at Companies House on 18 …
Top-heavy consultancy outfit; with some incredible people burdened by red tape. Not that the latter is rare in any consultancy outfit, nor does all the red tape come from IBM. My experience of working with them is generally you get what you ask for; therefore speccing things correctly is king. See Boeing & the MOD Chinook disaster for classic examples of what poor contracting does!
IBM has us on its books as a cash-cow for several deeply ingrained systems and as such I'm sure those capabilities will carry on. But it wasn't that long ago when people said the same about other, supposedly deeply ingrained suppliers that were unceremoniously discarded.
Is the hard part though. That's what consultants are supposed to help you do, by asking the right questions and talking to the right people to discover all those corner cases the average person won't consider.
If you can spec things correctly on your own, you don't need a third party to do things for you. You can have your own staff do it. It is easy to write a program or create a process to do almost anything if you have 100% correct and complete specs from the start. Someday I might see such perfect specs be provided to me as a consultant, and someday I might start farting rainbows.
I knew someone who was doing a PhD on predicting, by textual analysis of their annual statements, which companies had started the process of failing. She tried every sort of textual analysis, but whatever she did, she simply couldn't find any characteristic differences; the corporate bullshit emitted is exactly the same, whether they're doing well or know that they're circling the drain.
Text - no. But there are some obvious numerical indicators. Ultimately the only equation that matters in the long run is income minus expenditure. If you're into any form of share dealing at anything other than a level of gambling, you should really be looking at annual accounts for the headline figures at very least.
Unpicking it, is, unfortunately a question of unpicking the sopping mess and the many loopholes used to disguise income. Expenditure is more difficult to hide. P/E is, assuming accounting fiddles don't disguise it, probably the best way for a layperson to follow it.
There are some unprofitable companies out there that continue to pay a dividend. This is very obvious amongst mobile phone operators, some of which are paying relatively high dividends to attract investment; on the prospect that if they do get an edge in on the 5G market (which they are targetting heavily) that they could come out the other side a profitable firm. The market must agree with that assessment or the money would not be forthcoming regardless of divi. Fail, and the company collapses (unless it finds funding from somewhere else again).
Bonkers? Yes. Welcome to laissez-faire economics people!
Income minus expenditure can be very misleading for companies with a lot of capital expenses. They are still depreciating many things they fully paid for years ago, and fully paying for things now that they won't full recognize as expenses for years if not decades in some cases.
If you are going to look at only ONE metric, cash flow is where you want to look. That's the limiting factor for every business. You can stave off failure even in a negative cash flow situation by borrowing, but once that well runs dry you're done.
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