Fluent Essays

Assignment Content Competencies Analyze the role of accounting in business operations. Apply the principles of accrual accounting and accounting cycles. Appraise the financial health and performance of a company. Analyze cost behaviors and production costing methods. Employ accounting data for business analysis and prediction. Evaluate accounting-related legal and ethical business implications. Student Success Criteria View the grading rubric for this deliverable by selecting the “This item is graded with a rubric” link, which is located in the Details & Information pane. Scenario The Vice President of Finance called you into a meeting to discuss the overall vision and future of your company. He states that he has always admired International Business Machines (IBM) since he studied the company in college. The VP has not followed the company as of late and would like you to prepare an update as to how IBM is doing over last three years and the top line outlook for next year. The VP would like you to use similar techniques that you have used in writing your previous reports. Instructions Using the financial statements of International Business Machines Corporation: Prepare an income statement vertical and horizontal analysis of International Business Machines Corporation using three years of data. Use Mergent Online to download income statement to Excel. Be sure to search for International Business Machines Corp, and choose the United States entity.FAQ for accessing and downloading income statements Using the line item descriptions from the income statement, create a new tab and identify which expenses (costs) are likely fixed, variable, product, and period costs. Using Mergent Online, create a ratio analysis report showing International Business Machines Corporation and its largest 4 competitors based on total revenue Download the following ratios and peer average into Excel. Format and arrange the data in a professional manner: Current Ratio Gross Margin Inventory \% of TA Inventory Turnover Debt/Equity Ratio Net Current Assets \% TA Net PPE \% TA Net Profit Margin \% Operating Margin \% R + D \% TR ROA \% ROE \% ROI \% Selling and General Admin \% TR Total Asset Turnover Using the historical income statement data, prepare a sales (revenue) forecast for the upcoming year including your assumptions, calculations, and rationale. Using the SEC.gov website, find articles on of International Business Machines Corporation and comment in a Word document on any recent accounting standards or ethical considerations that affect the company. Template to Use: IBM Income Stmt 2016-2020 Powered by Clearbit International Business Machines Corp (NYS: IBM) Exchange rate used is that of the Year End reported date As Reported Annual Income Statement Report Date 12/31/2020 12/31/2019 12/31/2018 12/31/2017 12/31/2016 Currency USD USD USD USD USD Audit Status Not Qualified Not Qualified Not Qualified Not Qualified Not Qualified Consolidated Yes Yes Yes Yes Yes Scale Thousands Thousands Thousands Thousands Thousands Services revenue 45004000 47493000 51350000 50709000 51268000 Sales revenue 27484000 28252000 26641000 26715000 26942000 Financing revenue 1133000 1402000 1599000 1715000 1710000 Total revenue 73620000 77147000 79591000 79139000 79919000 Cost of services 30404000 32491000 34059000 34447000 34021000 Cost of sales 6934000 7263000 7464000 7256000 6559000 Cost of financing 708000 904000 1132000 1210000 1044000 Total cost 38046000 40659000 42655000 42913000 41625000 Gross profit 35575000 36488000 36936000 36227000 38294000 Selling, general & administrative expense - other 16800000 17099000 16438000 16568000 16971000 Advertising & promotional expense 1542000 1647000 1466000 1445000 1327000 Workforce rebalancing charges 2922000 555000 598000 199000 1038000 Retirement-related costs - - - 959000 742000 Amortization of acquired intangible assets 1123000 762000 435000 496000 503000 Stock-based compensation 586000 453000 361000 384000 401000 Bad debt expense - 89000 67000 55000 87000 Provision for/benefit (from) expected credit loss expense 109000 - - - - Selling, general & administrative expense 23082000 20604000 19366000 20107000 21069000 Research, development & engineering 6333000 5989000 5379000 5787000 5751000 Intellectual property & custom development income 626000 648000 1026000 1466000 1631000 Foreign currency transaction gains (losses) -114000 279000 427000 -405000 116000 Gains (losses) on derivative instruments 101000 -150000 -434000 341000 -260000 Interest income 105000 349000 264000 144000 108000 Net gains (losses) from securities & investment assets 22000 32000 101000 20000 -23000 Retirement-related income (costs) -1123000 -615000 -1572000 - - Other income 149000 937000 63000 116000 -85000 Other income & expense -861000 968000 1152000 -216000 145000 Interest expense 1288000 1344000 723000 615000 630000 Total expense & other income -30937000 -26322000 -25594000 24827000 25964000 Income from continuing operations before income taxes - U.S. operations -1726000 -315000 627000 560000 3650000 Income from continuing operations before income taxes - non-U.S. operations 6363000 10481000 10715000 10840000 8680000 Income from continuing operations before income taxes 4637000 10166000 11342000 11400000 12330000 Provision for (benefit from) U.S. federal income taxes - current 315000 331000 -342000 2388000 186000 Provision for (benefit from) U.S. federal income taxes - deferred 1177000 -839000 1377000 77000 -746000 Total provision for (benefit from) U.S. federal income taxes 1492000 -508000 1035000 2465000 -560000 Provision for (benefit from) U.S. state & local income taxes - current 316000 -85000 127000 55000 244000 Provision for (benefit from) U.S. state & local income taxes - deferred -315000 -82000 -292000 28000 -44000 Total provision for (benefit from) U.S. state & local income taxes 1000 -167000 -165000 83000 200000 Provision for (benefit from) nopn-U.S. income taxes - current 1827000 1829000 2135000 3891000 988000 Provision for (benefit from) nopn-U.S. income taxes - deferred -4184000 -423000 -386000 -797000 -179000 Total provision for (benefit from) nopn-U.S. income taxes -2357000 1406000 1749000 3094000 809000 Provision for (benefit from) income taxes -864000 731000 2619000 5642000 449000 Income (loss) from continuing operations 5501000 9435000 8723000 5758000 11881000 Income (loss) from discontinued operations, net of tax 89000 -4000 5000 -5000 -9000 Net income (loss) 5590000 9431000 8728000 5753000 11872000 Weighted average shares outstanding - basic 890348.679 887235.105 912048.072 932828.295 955422.53 Weighted average shares outstanding - diluted 896563.971 892813.376 916315.714 937385.625 958714.097 Year end shares outstanding 892653.424 887110.454 892479.41 922179.225 945867.403 Earnings (loss) per share from continuing operations - basic 6.18 10.63 9.56 6.17 12.44 Earnings (loss) per share from discontinued operations - basic 0.1 0 0.01 0 -0.01 Net earnings (loss) per share - basic 6.28 10.63 9.57 6.17 12.43 Earnings (loss) per share from continuing operations - diluted 6.13 10.57 9.51 6.14 12.39 Earnings (loss) per share from discontinued operations - diluted 0.1 -0.01 0.01 0 -0.01 Net earnings (loss) per share - diluted 6.23 10.56 9.52 6.14 12.38 Dividends per share of common stock 6.51 6.43 6.21 - - Total number of employees 375300 383800 350600 366600 380300 Number of common stockholders 373649 380707 395480 408697 425272 Foreign currency translation adjustments -1500000 -39000 -730000 152000 -20000 IBM Balance Sheet 2016-2020 Powered by Clearbit International Business Machines Corp (NYS: IBM) Exchange rate used is that of the Year End reported date As Reported Annual Balance Sheet Report Date 12/31/2020 12/31/2019 12/31/2018 12/31/2017 12/31/2016 Currency USD USD USD USD USD Audit Status Not Qualified Not Qualified Not Qualified Not Qualified Not Qualified Consolidated Yes Yes Yes Yes Yes Scale Thousands Thousands Thousands Thousands Thousands Cash & cash equivalents 13212000 8172000 11379000 11972000 7826000 Restricted cash 463000 141000 225000 - - Marketable securities 600000 696000 618000 608000 701000 Notes & accounts receivable - trade, gross 7483000 8169000 7741000 9225000 9472000 Less: allowances 351000 299000 309000 297000 290000 Notes & accounts receivable - trade, net 7132000 7870000 7432000 8928000 9182000 Short-term financing receivables, gross 11110000 14380000 22632000 21982000 19343000 Less: allowances 218000 188000 244000 261000 337000 Short-term financing receivables, net 10892000 14192000 22388000 21721000 19006000 Other accounts receivable, gross 742000 1766000 781000 1017000 1105000 Less: allowances 28000 33000 38000 36000 48000 Other accounts receivable, net 714000 1733000 743000 981000 1057000 Finished goods 190000 220000 266000 333000 358000 Work in process & raw materials 1649000 1399000 1415000 1250000 1195000 Inventory 1839000 1619000 1682000 1583000 1553000 Deferred costs 2107000 1896000 2300000 - - Prepaid expenses & other current assets 2206000 2101000 2378000 3942000 4564000 Total current assets 39165000 38420000 49146000 49735000 43888000 Land & land improvements 381000 365000 448000 480000 506000 Buildings & building improvements - - - - 6326000 Buildings & building & leasehold improvements 9416000 9364000 9640000 10073000 - Information technology equipment 19419000 18054000 17468000 16874000 - Production, engineering, office & other equipment 3695000 3721000 4081000 4060000 - Plant, laboratory & office equipment - - - - 22318000 Plant & other property, gross 32911000 31504000 31636000 31487000 29150000 Less: accumulated depreciation 22968000 21726000 21276000 20832000 18842000 Plant & other property, net 9943000 9778000 10359000 10655000 10308000 Rental machines, gross 265000 523000 824000 844000 984000 Less: accumulated depreciation - rental machines 168000 292000 392000 383000 461000 Rental machines, net 97000 232000 433000 462000 523000 Property, plant & equipment, gross 33176000 32028000 32460000 32331000 30133000 Less: accumulated depreciation 23136000 22018000 21668000 21215000 19303000 Property, plant & equipment, net 10040000 10010000 10792000 11116000 10830000 Operating right-of-use assets - net 4686000 4996000 - - - Long-term financing receivables 7086000 8712000 9148000 9550000 9021000 Prepaid pension assets 7610000 6865000 4666000 4643000 3034000 Deferred costs 2449000 2472000 2676000 - - Deferred taxes 9241000 5182000 5216000 4862000 5224000 Goodwill 59617000 58222000 36265000 36788000 36199000 Intangible assets, net 13796000 15235000 3087000 3742000 4688000 Deferred transition & set-up costs & other deferred arrangements - - - 1537000 1497000 Derivatives, non-current 151000 94000 347000 757000 594000 Alliance investments - equity method 172000 184000 192000 90000 85000 Alliance investments - non-equity method 54000 38000 34000 32000 19000 Prepaid software - - - 300000 230000 Long-term deposits 239000 242000 268000 271000 267000 Other receivables 423000 276000 359000 455000 416000 Employee benefit related 238000 253000 263000 316000 272000 Prepaid income taxes 777000 664000 626000 590000 477000 Other assets 227000 321000 296000 572000 729000 Investments & sundry assets 2282000 2074000 2386000 4919000 4585000 Total assets 155971000 152186000 123382000 125356000 117470000 Taxes 3301000 2839000 3046000 4219000 3235000 Commercial paper - 304000 2995000 1496000 899000 Short-term loans 130000 971000 161000 276000 375000 Long-term debt - current maturities 7053000 7522000 7051000 5214000 6239000 Short-term debt 7183000 8797000 10207000 6987000 7513000 Accounts payable 4908000 4896000 6558000 6451000 6209000 Compensation & benefits 3440000 3406000 3310000 3644000 3577000 Deferred income 12833000 12026000 11165000 11552000 11035000 Operating lease liabilities 1357000 1380000 - - - Other accrued expenses & liabilities 6847000 4357000 3941000 4510000 4705000 Total current liabilities 39869000 37701000 38227000 37363000 36275000 U.S dollar notes & debentures - - - - 30563000 U.S dollar debt 41218000 44594000 30131000 31515000 - Other debt in Euros 18355000 14306000 10011000 10502000 7122000 Other debt in U.K. pounds 411000 1390000 1338000 1420000 1296000 Other debt in Japanese yen 1409000 1339000 1325000 1291000 1576000 Other debt in Swiss francs - - - - 7000 Other debt in Canadian - - - - 373000 Other currencies debt 324000 375000 391000 717000 208000 Finance lease obligations 296000 204000 - - - Long-term debt 62013000 62207000 43196000 45445000 41145000 Less: net unamortized premium (discount) -875000 -881000 -802000 -826000 -839000 Less: net unamortized debt issuance costs -156000 -142000 -76000 -93000 -82000 Add: fair value adjustment 426000 440000 337000 526000 669000 Long-term debt before current maturities 61408000 61624000 42656000 45052000 40893000 Less: current maturities 7053000 7522000 7051000 5214000 6239000 Long-term debt 54355000 54102000 35605000 39837000 34655000 Retirement & nonpension postretirement benefit obligations 18248000 17142000 17002000 16720000 17070000 Deferred income 4301000 3851000 3445000 3746000 3600000 Operating lease liabilities 3574000 3879000 - - - Income tax reserves 5274000 5118000 4195000 4193000 2621000 Excess 401(k) Plus Plan 1635000 1521000 1380000 1583000 1494000 Disability benefits 452000 478000 507000 504000 538000 Derivatives liabilities 40000 506000 206000 38000 61000 Special restructuring actions - - - - 358000 Workforce reductions 956000 725000 736000 804000 424000 Deferred taxes 5472000 5230000 3696000 545000 424000 Other taxes payable 253000 42000 40000 948000 90000 Enviromental accruals 246000 254000 244000 262000 262000 Warranty accruals 33000 45000 76000 56000 68000 Asset retirement obligations 117000 94000 111000 115000 142000 Acquisition related 60000 9000 13000 88000 111000 Divestiture related 62000 65000 173000 253000 270000 Other liabilities 297000 439000 796000 577000 613000 Other liabilities 14897000 14526000 12174000 9965000 7477000 Total liabilities 135244000 131202000 106452000 107631000 99078000 Common stock 56556000 55895000 55151000 54566000 53935000 Retained earnings 162717000 162954000 159206000 153126000 152759000 Treasury stock, at cost 169339000 169413000 168071000 163507000 159050000 Net unrealized gains (losses) on cash flow hedges -456000 -179000 284000 35000 319000 Foreign currency translation adjustments -4665000 -3700000 -3690000 -2834000 -3603000 Net change retirement-related benefit plans -24216000 -24718000 -26083000 -23796000 -26116000 Net unrealized gains (losses) on available-for-sale securities - - 0 3000 2000 Accumulated other comprehensive income (loss) -29337000 -28597000 -29490000 -26592000 -29398000 Total International Business Machines Corp. stockholders equity 20597000 20841000 16796000 17594000 18246000 Noncontrolling interests 129000 144000 134000 131000 146000 Total equity 20727000 20985000 16929000 17725000 18392000 Competitor Financials 2016-2019 IBM 2019 2018 2017 2016 Operating Income  9896000 12192000 11673000 11922000 Net Sales  75745000 77992000 77424000 78209000 COGS 7263000      7,464,000      7,256,000      6,559,000 Net Income  9431000      8,728,000      5,753,000     11,872,000 R & D Costs  5989000      5,379,000      5,787,000      5,751,000 Total Revenue  77147000 79591000 79139000 79919000 SG&A 17099000     16,438,000      16,568,000      16,971,000  PPE, Net  10010000     10,792,000      11,116,000     10,830,000  Inventory  1619000      1,682,000      1,583,000      1,553,000 Total Assets  152186000 123382000 125356000 117470000 Microsoft  2019 2018 2017 2016 Operating Income  42,959,000     35,058,000      22,326,000  20,182,000 Net Sales  66,069,000     64,497,000      57,190,000  61,502,000 COGS 16,273,000     15,420,000  15,175,000 17,880,000 Net Income  39,240,000     16,571,000      21,204,000  16,798,000 R & D Costs  16,876,000     14,726,000      13,037,000  11,988,000 Total Revenue  125,843,000   110,360,000     89,950,000  85,320,000 SG&A 23,098,000     22,223,000      20,020,000      19,260,000  PPE, Net  36,477,000     29,460,000      23,734,000  18,356,000 Inventory  2,063,000      2,662,000      2,181,000 2,251,000 Total Assets  286,556,000 258,848,000 241,086,000 193,694,000 Dell  2019 2018 2017 2016 Operating Income  (191,000) (2,416,000) (2,390,000) (514,000) Net Sales  90,621,000 78,660,000 61,642,000 50,911,000 COGS 65,568,000 58,606,000 48,683,000 42,524,000 Net Income (loss) (2,310,000) (2,849,000) (1,167,000) (1,104,000) R & D Costs  4,604,000      4,384,000      2,636,000 1,051,000 Total Revenue  90,621,000 79,040,000 62,164,000 50,911,000 SG&A 20,640,000     19,003,000      13,575,000  7,850,000 PPE, Net  5,259,000      5,390,000      5,653,000 1,649,000 Inventory  3,649,000      2,678,000      2,538,000 1,619,000 Total Assets  111,820,000 122,281,000 118,206,000 45,122,000 Intel 2019 2018 2017 2016 Operating Income  22,035,000 23,316,000     17,936,000  12,874,000 Net Sales 71,965,000 70,848,000 62,761,000 59,387,000 Gross Margin 42,140,000 43,737,000 39,069,000 36,191,000 COGS 29,825     27,111,000     23,692,000  23,196,000 Net Income  21,048,000     21,053,000       9,601,000 10,316,000 R & D Costs  13,362,000     13,543,000      13,098,000  12,740,000 Total Revenue  71,965,000     70,848,000      62,761,000  59,387,000 SG&A 6,150,000      6,750,000      7,474,000 8,397,000 PPE, Net  55,386,000     48,976,000      41,109,000  36,171,000 Inventory  8,744,000      7,253,000      6,983,000 5,553,000 Total Assets  136,524,000 127,963,000 123,249,000 113,327,000 General Dynamic 2019 2018 2017 2016 Operating Income  4,648,000      4,457,000 4,236,000 3,744,000 Net Sales  23,130,000     20,149,000      19,016,000  19,885,000 COGS 18,569,000     15,894,000      14,799,000  15,443,000 Net Income  3,484,000 3,358,000      2,912,000 2,955,000 R & D Costs  - 0                  -                    -                    -   Total Revenue  39,350,000     36,193,000      30,973,000  31,353,000 SG&A 2,411,000      2,258,000      2,010,000 1,940,000 PPE, Net  4,475,000      4,348,000      3,517,000 3,467,000 Inventory  6,306,000      5,977,000      5,303,000 3,523,000 Total Assets  48,841,000 45,408,000 35,046,000 32,872,000 Horizontal Analysis International Business Machine Corp (IBM) International Business Machine Corp (IBM) 2020-2019 International Business Machine Corp (IBM) 2019-2018 Dollar Change 2020-2019 Percent Change 2019-2020 Dollar Change 2019-2018 Percent Change 2019-2018 2020 2019 Formula: 2020-2019 Formula: 2020-2019/2019 2019 2018 Formula: 2019-2018 Formula: 2019-2018/2018 Services revenue $ 45,004,000 $ 47,493,000 $ 47,493,000 $ 51,350,000 Sales revenue $ 27,484,000 $ 28,252,000 $ 28,252,000 $ 26,641,000 Financing revenue $ 1,133,000 $ 1,402,000 $ 1,402,000 $ 1,599,000 Total revenue $ 73,620,000 $ 77,147,000 $ 77,147,000 $ 79,591,000 Cost of services $ 30,404,000 $ 32,491,000 $ 32,491,000 $ 34,059,000 Cost of sales $ 6,934,000 $ 7,263,000 $ 7,263,000 $ 7,464,000 Cost of financing $ 708,000 $ 904,000 $ 904,000 $ 1,132,000 Total cost $ 38,046,000 $ 40,659,000 $ 40,659,000 $ 42,655,000 Gross profit $ 35,575,000 $ 36,488,000 $ 36,488,000 $ 36,936,000 Selling, general & administrative expense - other $ 16,800,000 $ 17,099,000 $ 17,099,000 $ 16,438,000 Advertising & promotional expense $ 1,542,000 $ 1,647,000 $ 1,647,000 $ 1,466,000 Workforce rebalancing charges $ 2,922,000 $ 555,000 $ 555,000 $ 598,000 Retirement-related costs - - - - Amortization of acquired intangible assets $ 1,123,000 $ 762,000 $ 762,000 $ 435,000 Stock-based compensation $ 586,000 $ 453,000 $ 453,000 $ 361,000 Bad debt expense - $ 89,000 $ 89,000 $ 67,000 Provision for/benefit (from) expected credit loss expense $ 109,000 - - - Selling, general & administrative expense $ 23,082,000 $ 20,604,000 $ 20,604,000 $ 19,366,000 Research, development & engineering $ 6,333,000 $ 5,989,000 $ 5,989,000 $ 5,379,000 Intellectual property & custom development income $ 626,000 $ 648,000 $ 648,000 $ 1,026,000 Foreign currency transaction gains (losses) $ (114,000) $ 279,000 $ 279,000 $ 427,000 Gains (losses) on derivative instruments $ 101,000 $ (150,000) $ (150,000) $ (434,000) Interest income $ 105,000 $ 349,000 $ 349,000 $ 264,000 Net gains (losses) from securities & investment assets $ 22,000 $ 32,000 $ 32,000 $ 101,000 Retirement-related income (costs) $ (1,123,000) $ (615,000) $ (615,000) $ (1,572,000) Other income $ 149,000 $ 937,000 $ 937,000 $ 63,000 Other income & expense $ (861,000) $ 968,000 $ 968,000 $ 1,152,000 Interest expense $ 1,288,000 $ 1,344,000 $ 1,344,000 $ 723,000 Total expense & other income $ (30,937,000) $ (26,322,000) $ (26,322,000) $ (25,594,000) Income from continuing operations before income taxes - U.S. operations $ (1,726,000) $ (315,000) $ (315,000) $ 627,000 Income from continuing operations before income taxes - non-U.S. operations $ 6,363,000 $ 10,481,000 $ 10,481,000 $ 10,715,000 Income from continuing operations before income taxes $ 4,637,000 $ 10,166,000 $ 10,166,000 $ 11,342,000 Provision for (benefit from) U.S. federal income taxes - current $ 315,000 $ 331,000 $ 331,000 $ (342,000) Provision for (benefit from) U.S. federal income taxes - deferred $ 1,177,000 $ (839,000) $ (839,000) $ 1,377,000 Total provision for (benefit from) U.S. federal income taxes $ 1,492,000 $ (508,000) $ (508,000) $ 1,035,000 Provision for (benefit from) U.S. state & local income taxes - current $ 316,000 $ (85,000) $ (85,000) $ 127,000 Provision for (benefit from) U.S. state & local income taxes - deferred $ (315,000) $ (82,000) $ (82,000) $ (292,000) Total provision for (benefit from) U.S. state & local income taxes $ 1,000 $ (167,000) $ (167,000) $ (165,000) Provision for (benefit from) nopn-U.S. income taxes - current $ 1,827,000 $ 1,829,000 $ 1,829,000 $ 2,135,000 Provision for (benefit from) nopn-U.S. income taxes - deferred $ (4,184,000) $ (423,000) $ (423,000) $ (386,000) Total provision for (benefit from) nopn-U.S. income taxes $ (2,357,000) $ 1,406,000 $ 1,406,000 $ 1,749,000 Provision for (benefit from) income taxes $ (864,000) $ 731,000 $ 731,000 $ 2,619,000 Income (loss) from continuing operations $ 5,501,000 $ 9,435,000 $ 9,435,000 $ 8,723,000 Income (loss) from discontinued operations, net of tax $ 89,000 $ (4,000) $ (4,000) $ 5,000 Net income (loss) $ 5,590,000 $ 9,431,000 $ 9,431,000 $ 8,728,000 Weighted average shares outstanding - basic $ 890,349 $ 887,235 $ 887,235 $ 912,048 Weighted average shares outstanding - diluted $ 896,564 $ 892,813 $ 892,813 $ 916,316 Year end shares outstanding $ 892,653 $ 887,110 $ 887,110 $ 892,479 Earnings (loss) per share from continuing operations - basic $ 6 $ 11 $ 11 $ 10 Earnings (loss) per share from discontinued operations - basic $ 0 $ - 0 $ - 0 $ 0 Net earnings (loss) per share - basic $ 6 $ 11 $ 11 $ 10 Earnings (loss) per share from continuing operations - diluted $ 6 $ 11 $ 11 $ 10 Earnings (loss) per share from discontinued operations - diluted $ 0 $ (0) $ (0) $ 0 Net earnings (loss) per share - diluted $ 6 $ 11 $ 11 $ 10 Dividends per share of common stock $ 7 $ 6 $ 6 $ 6 Total number of employees $ 375,300 $ 383,800 $ 383,800 $ 350,600 Number of common stockholders $ 373,649 $ 380,707 $ 380,707 $ 395,480 Foreign currency translation adjustments $ (1,500,000) $ (39,000) $ (39,000) $ (730,000) Vertical Analysis Income Statement Vertical Analysis International Business Machine Corp (IBM) Formula =number / total revenue Year 2020 2020 2019 2019 2018 2018 Services revenue $ 45,004,000 $ 47,493,000 $ 51,350,000 Sales revenue $ 27,484,000 $ 28,252,000 $ 26,641,000 Financing revenue $ 1,133,000 $ 1,402,000 $ 1,599,000 Total revenue $ 73,620,000 100.00\% $ 77,147,000 100.00\% $ 79,591,000 100.00\% Cost of services $ 30,404,000 $ 32,491,000 $ 34,059,000 Cost of sales $ 6,934,000 $ 7,263,000 $ 7,464,000 Cost of financing $ 708,000 $ 904,000 $ 1,132,000 Total cost $ 38,046,000 $ 40,659,000 $ 42,655,000 Gross profit $ 35,575,000 $ 36,488,000 $ 36,936,000 Selling, general & administrative expense - other $ 16,800,000 $ 17,099,000 $ 16,438,000 Advertising & promotional expense $ 1,542,000 $ 1,647,000 $ 1,466,000 Workforce rebalancing charges $ 2,922,000 $ 555,000 $ 598,000 Retirement-related costs - - - Amortization of acquired intangible assets $ 1,123,000 $ 762,000 $ 435,000 Stock-based compensation $ 586,000 $ 453,000 $ 361,000 Bad debt expense - $ 89,000 $ 67,000 Provision for/benefit (from) expected credit loss expense $ 109,000 - - Selling, general & administrative expense $ 23,082,000 $ 20,604,000 $ 19,366,000 Research, development & engineering $ 6,333,000 $ 5,989,000 $ 5,379,000 Intellectual property & custom development income $ 626,000 $ 648,000 $ 1,026,000 Foreign currency transaction gains (losses) $ (114,000) $ 279,000 $ 427,000 Gains (losses) on derivative instruments $ 101,000 $ (150,000) $ (434,000) Interest income $ 105,000 $ 349,000 $ 264,000 Net gains (losses) from securities & investment assets $ 22,000 $ 32,000 $ 101,000 Retirement-related income (costs) $ (1,123,000) $ (615,000) $ (1,572,000) Other income $ 149,000 $ 937,000 $ 63,000 Other income & expense $ (861,000) $ 968,000 $ 1,152,000 Interest expense $ 1,288,000 $ 1,344,000 $ 723,000 Total expense & other income $ (30,937,000) $ (26,322,000) $ (25,594,000) Income from continuing operations before income taxes - U.S. operations $ (1,726,000) $ (315,000) $ 627,000 Income from continuing operations before income taxes - non-U.S. operations $ 6,363,000 $ 10,481,000 $ 10,715,000 Income from continuing operations before income taxes $ 4,637,000 $ 10,166,000 $ 11,342,000 Provision for (benefit from) U.S. federal income taxes - current $ 315,000 $ 331,000 $ (342,000) Provision for (benefit from) U.S. federal income taxes - deferred $ 1,177,000 $ (839,000) $ 1,377,000 Total provision for (benefit from) U.S. federal income taxes $ 1,492,000 $ (508,000) $ 1,035,000 Provision for (benefit from) U.S. state & local income taxes - current $ 316,000 $ (85,000) $ 127,000 Provision for (benefit from) U.S. state & local income taxes - deferred $ (315,000) $ (82,000) $ (292,000) Total provision for (benefit from) U.S. state & local income taxes $ 1,000 $ (167,000) $ (165,000) Provision for (benefit from) nopn-U.S. income taxes - current $ 1,827,000 $ 1,829,000 $ 2,135,000 Provision for (benefit from) nopn-U.S. income taxes - deferred $ (4,184,000) $ (423,000) $ (386,000) Total provision for (benefit from) nopn-U.S. income taxes $ (2,357,000) $ 1,406,000 $ 1,749,000 Provision for (benefit from) income taxes $ (864,000) $ 731,000 $ 2,619,000 Income (loss) from continuing operations $ 5,501,000 $ 9,435,000 $ 8,723,000 Income (loss) from discontinued operations, net of tax $ 89,000 $ (4,000) $ 5,000 Net income (loss) $ 5,590,000 $ 9,431,000 $ 8,728,000 Weighted average shares outstanding - basic $ 890,349 $ 887,235 $ 912,048 Weighted average shares outstanding - diluted $ 896,564 $ 892,813 $ 916,316 Year end shares outstanding $ 892,653 $ 887,110 $ 892,479 Earnings (loss) per share from continuing operations - basic $ 6 $ 11 $ 10 Earnings (loss) per share from discontinued operations - basic $ 0 $ - 0 $ 0 Net earnings (loss) per share - basic $ 6 $ 11 $ 10 Earnings (loss) per share from continuing operations - diluted $ 6 $ 11 $ 10 Earnings (loss) per share from discontinued operations - diluted $ 0 $ (0) $ 0 Net earnings (loss) per share - diluted $ 6 $ 11 $ 10 Dividends per share of common stock $ 7 $ 6 $ 6 Total number of employees $ 375,300 $ 383,800 $ 350,600 Number of common stockholders $ 373,649 $ 380,707 $ 395,480 Foreign currency translation adjustments $ (1,500,000) $ (39,000) $ (730,000) Expense Behavior Expenses (Select the answer using the Dropdown) Fixed or Variable Product or Period Selling, general & administrative expense - other Variable Product Advertising & promotional expense Workforce rebalancing charges Retirement-related costs Amortization of acquired intangible assets Bad debt expense Selling, general & administrative expense Research, development & engineering expense Interest …