ACCY121 Presentation on IBM, Palantir, and Intuit PDF

ACCY121- AUTHENTIC REPORT by group 02 contents Table of Introduction to all the Ratio analysis companies Trend Non-financial information analysis analysis References & Rec...

ACCY121- AUTHENTIC REPORT by group 02 contents Table of Introduction to all the Ratio analysis companies Trend Non-financial information analysis analysis References & Recommendati Appendix ons  Executive summary The PowerPoint offers a comprehensive and easily accessible overview of IBM, Palantir Technologies, and Intuit. It represents all available data in a detailed format as the report includes the key procedures and analytical tools to display the financial position using trend analysis (from year '19 and year '23) and ratio analysis (for year '23). This report compares the company to evaluate which one would be the best investment. Furthermore, the report includes a provision of key non-financial factors in qualitative terms regarding internal company ethics governance, adherence to environmental standards, sustainability, and more within the firms. The objective of this report is to provide an accurate assessment of the companies’ health and position, as well as to point out gaps and provide insightful recommendations on the companies’ operations and their consequences. IBM, Palantir Technologies, and Intuit have been few of the leading tech companies globally for decades. Each with their specialties in technological operations to help pave the way for a more advanced future, aiding the sustainable growth of AI and other vital software.  IB M IBM (International Business Machines Corporation) is a technology company headquartered in Armonk, New York, with offices in over 170 countries. Founded: June 16, 1911, Endicott, New York, United States. The company operates in industries such as artificial intelligence (AI), cloud computing, cybersecurity, data analytics, IT consulting, and quantum computing. IBM collaborates with clients across industries such as healthcare, finance, government, and manufacturing to integrate technologies like AI, hybrid cloud, and blockchain into their operations. Interesting aspects: A notable trend for IBM its focus on AI-powered digital transformation and sustainability. Recent News: IBM recently expanded its partnership with Microsoft, launching new Experience Zones to help businesses explore the potential of AI and cloud technologies.  Intu Main products include: QuickBooks: An accounting software TurboTax: A tax preparation it Intuit Inc. is a global financial technology company software headquartered in Mountain View, California, founded in Credit Karma: A platform 1983. It operates in the fintech industry, offering providing free credit scores, credit monitoring, and financial products. software and services that help individuals and Mailchimp: A marketing platform businesses manage their finances. Intuit focuses heavily on offering tools for email marketing, AI-driven technology to enhance its product offerings. automation, and customer Recent Developments: Intuit continues to innovate engagement. with AI, recently unveiling new AI-powered features at its Investor Day event. Additionally, the company reported strong financial results for fiscal 2024, reflecting its strategic focus on integrating and enhancing its platforms.  Palantir Palantir Technologies is one of the leading IT companies globally, renowned for its powerful data analytics and AI solutions. technologies Based in Denver, Colorado, and founded in 2003, Palantir operates worldwide, serving industries such as defense, healthcare, and finance. It was recently ranked the #1 vendor in AI, Data Science, and Machine Learning by an independent research firm. Key Products: Gotham: A platform for data integration and analysis, primarily used by government agencies for intelligence and defense operations. Foundry: A data management platform that enables businesses to integrate, analyze, and act on data in real time. Apollo: A deployment and management platform for scaling Palantir’s software solutions across various environments. Recent Highlights: AI-Driven Growth: Palantir’s increasing focus on artificial intelligence has fueled its expansion and enhanced its product offerings. U.S. Government Contracts: The company's growing involvement in government contracts, particularly in defense and intelligence, continues to solidify its market position. Palantir’s expertise in big data, machine learning, and AI-driven analytics has made it a dominant player in the software and data analytics industry. Introduction to Ratio analysis Liquidity ratios Liquidity ratios measure a company's ability to meet its short-term obligations with its short-term assets (like cash, receivables, and inventory). These ratios are important for assessing the financial stability and solvency of a business. Profitability ratios Profitability ratios measure a company’s ability to generate profit relative to its revenue, assets, or equity. These ratios are critical for assessing the overall financial health and operational success of a business. Debt/solvency ratios Debt ratios assess the level of financial leverage (or debt) a company is using and its ability to meet its long-term financial obligations. These ratios are crucial for understanding a company’s financial risk. Efficiency ratios measure how effectively a company uses its assets and liabilities to generate sales and profit. These ratios help assess the operational efficiency of a business.  Liquidity Current ratio- Measures a company's ability to pay short- term obligations using their current assets or those due within one year. The average current ratio for tech companies falls between 1.5-3. This range ensures enough ratios liquidity to pay off current debts. IBM has a current ratio of 0.96 which is too low, raising concerns on its ability to repay debts. Although Intuit has a slightly lower current ratio than the benchmark, it is still more liquid than IBM but will possibly struggle to pay off its liabilities. Palantir Technologies has an overwhelming current ratio of 5.55, indicating a lot of uninvested cash in the company and the ability to pay debts. However, the excessive liquidity means they’re not effectively utilizing its assets to generate income or growth. Liquidity Quick ratio- Measures the ability of a business to pay its short- Palantir term liabilities by having assets that are readily convertible into IBM INTUIT tech cash.For most technology companies, a quick ratio between 1.0 and 2.0 is considered healthy. IBM has a quick ratio of 0.82 Current which is below average signaling lliquidity problems or could 0.96 1.47 5.55 be due to larger inventories. Intuit has a healthy quick ratio ratio suggesting minimal inventory and high amounts of cash, Quick receivables, or marketable securities. Palantir Technologies 0.82 1.08 5.41 has a greater than average quick ratio of 5.41 which again ratio indicates an underutilization of assets.  Profitability Profitability Palantir IBM INTUIT ratios tech Gross profit margin- The total amount of money you earn from sales before deductions. It shows how well a company manages its production costs. The average Gross gross profit margin for the information technology services industry is 37.9%. All the companies have a higher than average gross profit margin which could be due to profit 55.45 79.26 80.63 several reasons; the company is effectively managing its direct costs relative to margin revenue, High margins often indicate that the company has pricing power— the ability to charge customers premium prices without significantly affecting demand. In its annual report, IBM mentions that its high gross profit margin is “primarily driven Return on 33.67 14.14 7.01 by margin expansion in software services due to portfolio mix.” Palantir Technologies equity also states “The primary cause of this growth rate variation was the decrease in stock- based compensation expense and related expenses, net in cost of revenue and smaller growth in field service representatives and other direct costs relative to revenue growth as compared to the prior year.” Return on equity (ROE)- is a ratio that tells us the division of a company’s net income with its shareholder equity, which helps us identify if a company is profitable and how effective it is at generating profits. For the Tech industry, 15%-25% is a solid benchmark. 20%-30%+ is strong, particularly for established firms. Palantir Technologies has a relatively low ROE of 7.01 since it’s a younger company and focuses on reinvestment and expansion. Intuit has a lower than average ROE, also suggesting high levels of reinvestment which means that the company is more focused on driving long-term value. IBM is a well established company, hence it higher than average ROE, probably due to strong profitability, efficient use of capital, and significant market share.  Debt ratios IBM Debt ratios INTUIT Palantir tech The debt-to-equity ratio measures a company's reliance on debt relative to equity. In the tech sector, a ratio below 100% is preferred, debt-to- reflecting low capital intensity. IBM’s high debt-to-equity ratio (265.05) 265.05 38.73 6.44 equity ratio suggests substantial debt use, likely due to its infrastructure investments and acquisitions. Intuit’s lower ratio (38.73) indicates a Debt ratios 83.28 37.84 21.26 conservative approach, consistent with its revenue model and minimal debt needs. Palantir’s very low ratio (6.44) shows a preference for equity funding, supporting its high-growth, R&D-focused strategy. Overall, IBM’s high ratio contrasts with industry norms, while Intuit and Palantir align more closely with typical tech-sector expectations. The debt ratio shows the percentage of assets financed by debt, with higher ratios indicating more financial risk. In the tech sector, a typical debt ratio is 20-50%. IBM’s debt ratio (83.28%) is well above average, reflecting high leverage and potential financial risk due to its heavy debt use for capital and restructuring. Intuit’s ratio (37.84%) is within industry norms, showing balanced debt use. Palantir’s low ratio (21.26%) suggests a preference for equity funding, aligning with its growth-focused, asset-light approach. Overall, IBM’s high ratio contrasts with the industry, while Intuit and Palantir’s lower ratios indicate greater financial The asset turnover ratio shows how effectively a company Efficiency ratios uses its assets to generate revenue. In tech, ratios Efficiency ratios typically range from 0.5 to 1.0 due to the industry's asset- light, R&D-focused models. IBM’s lower ratio (0.47) Palantir suggests moderate efficiency, likely impacted by its IBM INTUIT tech infrastructure investments. Intuit’s ratio (0.52) aligns with the industry, reflecting efficient asset use, while Palantir’s Asset higher ratio (0.56) indicates strong asset utilization in its 0.47 0.52 0.56 turnover R&D-focused, asset-light model. Overall, IBM’s lower ratio contrasts with Intuit and Palantir's more efficient asset Accounts use. receivabl 8.3 33.77 7.14 e turnover The accounts receivable turnover ratio indicates how efficiently a company collects revenue, with higher ratios showing faster collections. In tech, the average ranges from 10 to 20. IBM’s ratio (8.3) and Palantir’s (7.14) are below the average, suggesting slower collections, likely due to extended payment terms with large clients and government contracts. Intuit’s high ratio (33.77) reflects fast collections and effective credit management, typical of its subscription- based software model. Thus, while IBM and Palantir have slower collection cycles, Intuit’s quick turnover aligns well with industry best  MORPH SHAPE TREND ANALYSIS INTRODUCTION IN THIS PART WE WILL BE DISCUSSING AND ASSESSING THE COMPANIES PERFORMANCE ACCORDING TO 4 DIFFERENT ATTRIBUTES WHICH ARE: REVENUE, CASH OF OPERATION, PROFIT BEFORE TAX, AND LASTLY THEIR TOTAL ASSETS. FORMULA USED: CURRENT YEAR/ PREVIOUS YEAR *100 MORPH SHAPE DEFINITONS : · REVENUE: IS THE MONEY GAINED INTO THE BUSINESS BECAUSE OF SELLING THEIR GOODS AND SERVICES. · TOTAL ASSETS: ARE THE TOTAL ITEMS THAT THE BUSINESS OWNS. · PROFIT BEFORE TAX: THE MONEY LEFT IN THE BUSINESS AFTER MEETING ALL THEIR PAYMENTS HOWEVER, THEY STILL NEED TO PAY FOR THE TAX. · CASH OF OPERATION IS THE CASH GAINED INTO THE FIRM DUE IT’S OPERATION WORKING OVERTIME. MORPH SHAPE DATA COLLECTED AND THE TREND ANALYSIS CALCULATED MORPH REVENUE SHAPE IBM had experienced an increase in revenue through out the last 5 years. This could be highly caused due to more of economic factors. Palantir is able to highly experience rise their revenue such as operating in an emerged economy allowing them to also take advantage of certain attributes that contributes in giving them a higher chances of financial success. Intuit Inc, relatively has been experiencing rise in their revenue. One of the economic factors that had been ana advantage for Intuit is inflation. MORPH SHAPE PROFIT BEFOR TAX In IBM its found to have higher profit before tax, allowing it to be highly profitable due to it’s increase in profit gained back into the firm after paying most of their expenses. Palantir is found to have a successful profit only within 2020, causing it to highly drop starting from 2021 due to several reasons such as: Delayed revenue realization, macroeconomic factors such as inflation, customer’s acquisition costs causing lower profit margins. Intuit is able to stay successful as they align well with economic trends and understand their customers needs and requirements at all time. MORPH CASH FROM SHAPE OPERATIONS IBM are still struggling to maintain their cash of operation which puts them financially at a risk as they can’t obtain much cash into the firm for any future risks or crisis that might occur which correlates with the fact that it might not be performing well constantly. Palantir is still facing issues with their cash of operation, mentioning how they are unable to obtain less gains from their operation and the decrease in profit gained into the firm leaving them to be less profitable and less likely to have an effective strategy in operating the business. Intuit is able to stay successful as they align well with economic trends and understand their customers needs and requirements at all time. MORPH TOTAL ASSETS SHAPE IBM is that they haven’t experienced enough growth in their total assets which explains how they would face more challenges with their expenses in the firm. This finally correlates with their profit before tax to be viewed getting slightly lower over time. Palantir had been facing higher total assets reinforcing the fact that it has been capable of having more owns leading to high liquidity if needed in the long term. Therefore, more chances of growth. Intuit was able to have quite a huge increase in their total assets from 2019 until 2023 allowing them to take advantage of it  Non-financial MORPH SHAPE analysis- INTUIT Customer Product and Brand Satisfaction Technology Reputation and Ethics Intuit iselaborate Briefly harnessing on cutting- what you want AI edge to technology discuss. Lorem to shape ipsum A core value at Intuit is Customer Briefly elaborate loyalty on is at what 84%you. dolor the future sit amet, of finance. consectetur The Integrity Without Customer want to discuss. satisfaction Loremscore ipsumis adipiscingaim products elit, tosed automate do Compromise. The company 61/100. dolor sit amet, consectetur eiusmod tempor financial processes. incididunt ut places the highest importance adipiscing elit, sed do labore. on trust and is committed to eiusmod tempor incididunt ut doing the right thing, even labore. when no one is watching. Employee Environment Morale and al and Social Corporate Accountabilit Culture y Intuit takes a holistic approach to climate and Very strict code of conduct for sustainability, driving employees. initiatives both within its own Self-owned approach to operations and supply chain, employee career growth as well as in the communities plans. it serves. ESG risk rating-16.8 Intuit has an employee rating which is low risk. of 4.3/5 on Glassdoor  Non-financial analysis- PALANTIR Customer Satisfaction TECH Product and Technology Brand Reputation According to Gartner, Palantir and Ethics is a "Leader" in data Customer loyalty is at 83%. analytics, with a downtime Privacy issues are a prevalent Customer satisfaction score is rate of 0.5%, which is less issue, with 30% of mentions 80/100. than the 2% industry average. being favorable and 20% being negative. Palantir receives a corporate responsibility score of 60 out of 100 from CSRHub. Employee Environment Morale and al and Social Corporate Accountabilit Culture y Palantir believes in giving back to the community alantir has a 3.9/5 rating on through volunteer programs Glassdoor, with reviewers and operating sustainably. praising pay but criticizing work-life balance. At 15%, Esg risk rating-22.6 which is turnover is higher than the medium risk. industry average.  MORPH SHAPE Non-financial analysis- IBM Customer Product and Brand Satisfaction Technology Reputation Intuit is harnessing cutting- and Ethics edge AI technology to shape Customer loyalty is at 84%. the future of finance. The One of the worlds most Customer satisfaction score is products aim to automate ethical companies unwavering 61/100. financial processes. commitment to integrity. Employee Environment Morale and al and Social Corporate Accountabilit Culture y IBM employs the latest digital solutions to tackle climate Employees feel welcomed in change, reduce greenhouse the ‘come as you are’ culture gas emissions, promote at IBM thus explaining the conservation, and prevent employee rating of 4.0 out of pollution. Esg risk rating-13.3 5 stars on Glassdoor. which is low risk. MORPH SHAPE RECOMMENDATIONS MORPH SHAPE AFTER ANALYZING IBM, INTUIT, AND PALANTIR TECHNOLOGIES, INTUIT INC. EMERGES AS THE TOP INVESTMENT CHOICE DUE TO ITS FINANCIAL PERFORMANCE, STRONG GROWTH , AND NON-FINANCIAL INDICATORS. FINANCIAL PERFORMANCE AND PROFITABILITY: REVENUE GROWTH PROFITABILITY EFFICIENCY GROWTH POTENTIAL-MARKET POSITION NON-FINANCIAL FACTORS: Purpose CORPORATE GOVERNANCE AND ETHICAL PRACTICES SUSTAINABILITY AND SOCIAL RESPONSIBILITY INTUIT INC. STANDS OUT AS THE BEST INVESTMENT OPTION DUE TO ITS STRONG FINANCIAL PERFORMANCE, EFFICIENT OPERATIONS, AND IMPRESSIVE GROWTH POTENTIAL. ITS STABLE AND SCALABLE BUSINESS MODEL, COMBINED WITH SOLID PROFITABILITY AND A COMMITMENT TO  MORPH SHAPE REFERENCE S Introduction- Rhttps://www.google.com/url?sa=i&url=https%3A%2F%2Fwww.euractiv.com%2Fsection%2Findustrial- strategy%2Fnews%2Fibm-plans-first-european-quantum-computing-centre-in-germany %2F&psig=AOvVaw3SXirot51fPOpJaX2BWv- W&ust=1731430897827000&source=images&cd=vfe&opi=89978449&ved=0CBQQjRxqFwoTCKDPwO7g1IkDFQAAAA AdAAAAABAE. https://www.google.com/url?sa=i&url=https%3A%2F%2Freport.woodard.com%2Farticles%2Fintuit- launches-intuit-enterprise-suite-fpwr- obtwr&psig=AOvVaw2HfDnm81t4wChcI7zXA9jK&ust=1731431352435000&source=images&cd=vfe&opi=89978449& ved=0CBQQjRxqFwoTCOiEn8_i1IkDFQAAAAAdAAAAABAE. Palantir. (n.d.). Palantir. https://www.palantir.com/ About | IBM. (n.d.). https://www.ibm.com/about Intuit®: Complete Financial Confidence. (n.d.). https://www.intuit.com/ Ratios - Team, C. (2023) Quick ratio. https://corporatefinanceinstitute.com/resources/accounting/quick-ratio-definition/ #:~:text=The%20Quick%20Ratio%2C%20also%20known,marketable%20securities%2C%20and%20accounts %20receivable. Fernando,J.(2024)Currentratioexplainedwithformulaandexamples. https://www.investopedia.com/terms/c/currentratio.asp#:~:text=The%20current%20ratio%20is%20a,current%20debt %20and%20other%20payables. Contributors, T. (2024) Financial Ratios Demystified: Essential metrics for tech industry decision makers.https://www.techfunnel.com/fintech/financial-ratios-overview-critical-for-tech-sector-insights/. Profit margin by industry, gross and net profit margins - FullRatio (no date). https://fullratio.com/profit-margin-by-industry. Trend analysis- Queensland Government (2022). Trend analysis for business improvement | Business Queensland. [online] Qld.gov.au. Available at: https://www.business.qld.gov.au/running-business/growing-business/trend-analysis. ‌  MORPH SHAPE REFERENCE S Non-financial analysis- IIntuit (2024). Intuit NPS & Customer Reviews. [online] Comparably. Available at: https://www.comparably.com/brands/intuit. ‌IBM (2024). IBM NPS & Customer Reviews. [online] Comparably. Available at: https://www.comparably.com/brands/ibm# [Accessed 16 Nov. 2024]. ‌Ibm.com. (2019). Industry Solutions. [online] Available at: https://www.ibm.com/industries. ‌Intuit. (n.d.). Intuit®: Technology & Engineering. [online] Available at: https://www.intuit.com/technology/. ‌Trust Comes First. (n.d.). Available at: https://www.ibm.com/investor/att/pdf/IBM_Business_Conduct_Guidelines.pdf. ‌Integrity Without Compromise Intuit’s Code of Conduct & Ethics. (n.d.). Available at: https://digitalasset.intuit.com/render/content/dam/intuit/ic/en_us/content/intuit-code-of-conduct-ethics-icom-enus.pdf. ‌Glassdoor. (n.d.). Intuit Reviews. [online] Available at: https://www.glassdoor.com/Reviews/Intuit-Reviews-E2293.htm. ‌Glassdoor. (n.d.). IBM Reviews. [online] Available at: https://www.glassdoor.com/Reviews/IBM-Reviews-E354.htm. sustainalytics.com. (n.d.). Company ESG Risk Rating – Sustainalytics. [online] Available at: https://www.sustainalytics.com/esg-rating/international- business-machines-corp/1007990596. ‌sustainalytics.com. (2021). Company ESG Risk Rating - Sustainalytics. [online] Available at: https://www.sustainalytics.com/esg-rating/intuit-inc/1007899417 [Accessed 16 Nov. 2024]. Ibm.com. (2023). IBM Impact: Environment. [online] Available at: https://www.ibm.com/impact/environment/ [Accessed 16 Nov. 2024]. www.palantir.com. (n.d.). Impact | Palantir. [online] Available at: https://www.palantir.com/impact/. In Palantir we trust? Regulation of data analysis platforms in public security - Lena Ulbricht, Simon Egbert, 2024 Full article: Resistance to platformization: Palantir in the Norwegian police Recommendation- Intuit reports strong full year results and sets fiscal 2023 guidance. (n.d.). Intuit Inc. https://investors.intuit.com/news-events/press-releases/detail/113/intuit-reports-strong-full-year-results-and-sets-fiscal-2023-guidance Intuit Inc. (INTU) Statistics & Valuation Metrics - Stock analysis. (n.d.). Stock Analysis. https://stockanalysis.com/stocks/intu/statistics/ Intuit reports strong fourth quarter and full year results; sets Fiscal 2024 guidance. (n.d.). Intuit Inc. https://investors.intuit.com/news-events/press- releases/detail/47/intuit-reports-strong-fourth-quarter-and-full-year-results-sets-fiscal-2024-guidance MORPH SHAPE APPENDIX Trend analysis calculations THE FORMULA USED FOR TREND ANALYSIS: · (CURRENT YEAR/ PREVIOUS YEAR *100 )