Ibm Benchmarks

IBM

IBM is based in Armonk, New York. The company was founded in 1910 as a computing-tabulating-recording company and changed its name to International Business Machines Corporation in 1924. (Yahoo.finance.com, 2007). IBM is an innovation company that serves the needs of enterprises and institutions worldwide. IBM seeks to deliver clients success by enabling its own capacity to innovate, so that it may differentiate its organizations to create unique competitive advantages (caps.fool.com, 2007). IBM offers short-term inventory and accounts receivable financing; lease and loan financing; and sells and leases used equipment. "The organization serves banking, insurance, education, government, healthcare, life sciences, aerospace and defense, automotive, chemical and petroleum, electronics, distribution, and communication markets" (Yahoo.finance.com, 2007).

Financial highlights are as follows:

"Profitability: Profit Margin is 10.38%; Operating Margin is 14.40%.

Management Effectiveness: Return on Assets is 8.69%; Return on Equity is 31.56%.

Income Statement: Revenue is $92.79 billion; Gross Profit is $38.30 billion; EBITDA is $19.20 billion; Quarterly Earnings Growth is 8%.

Balance Sheet: Total Cash is $10.78 billion; Total Debt is $23.95 billion; Total Debt/Equity is 0.861; Current Ratio is 1.155.

Cash Flow Statement: Operating Cash Flow is $14.91 billion; Leveraged Free Cash Flow is $6.15 billion.

Dividends and Splits: Payout Ratio is 20%. Last Split Factor was 2:1.

Trading information: Current Stock is trading at 114.81 (July 21, 2007); Beta = 1.81"

(Yahoo.finance.com, 2007).

Last year, (March) there was a similar issue facing IBM that is currently facing LEI. IBM decided to join forces with Hoplon Infotainment, Online Game Services Incorporated (OGSI) and Render Rocket under separate agreements to help them innovate in the gaming and animation industries. IBM responded by first recognizing how critical the role that new technology and services plays in the future of these industries. Render Rockets stated, "Ð'...with IBM as our partner, we are able to provide the highest quality infrastructure that enables us to add professionalism and reliability to our services" (Alberni, J. 2006). The outcomes of IBM's response to these issues are that IBM continues to work with small and medium companies around the world to empower innovative business models. From these examples, LEI could join forces with Shang-Wa to offer a greater variety of solutions specifically designed toward electronic companies to help manage the industry environment, reduce expenses, increase efficiency and generate more revenue. LEI could develop a flexible business model, like IBM did, to help enable small and medium-sized electronic companies to grow their businesses at low cost and low risk. In addition, LEI could find the expertise to help other electronic companies reduce expenses while increasing efficiency and profitability in this complex yet boundless market. In 2005, IBM received an Emmy award for its technical achievement in broadcasting (Alberni, J. 2006). If LEI follows in the same footsteps as IBM, it too could become an electronics services industry leader.

Sony

Sony Corporation, headquartered in Tokyo, Japan was founded as Tokyo Telecommunications Engineering Corporation in 1946 and changed its name to Sony Corporation in 1958. Sony operates through five segments: electronics, game, pictures, financial services, and other. The electronics segment manufactures and distributes audio-visual, informational, and communicative equipment, instruments, and devices worldwide. Sony markets its electronic products directly via the Internet, as well as through sales subsidiaries and local distributors (Yahoo.finance.com, 2007).

Financial highlights are as follows:

"Profitability: Profit Margin is 1.52%; Operating Margin is 1.11%.

Management Effectiveness: Return on Assets is 0.98%; Return on Equity is 3.84%.

Income Statement: Revenue is $67.97 billion; Gross Profit is $15.86 billion; EBITDA is $4.29 billion; Quarterly Earnings Growth is not given.

Balance Sheet: Total Cash is $4.31 billion; Total Debt is $8.98 billion; Total Debt/Equity is 0.325; Current Ratio is 1.28.

Cash Flow Statement: Operating Cash Flow is $4.60 billion; Leveraged Free Cash Flow is $694.75 million.

Dividends and Splits: Payout Ratio is 21%. Last Split Factor was 2:1.

Trading information: Current Stock Price is trading at 51.18 (July 21, 2007); Beta = 1.3"

(Yahoo.finance.com, 2007).

This year, (April) there was a similar issue facing Sony that is currently facing LEI. Sony and SanDisk Corporation announced that the two companies have agreed to a Memorandum of Understanding with the intention to develop a new memory card with the same high speed transfer technology compliant to industry standard. These two companies have a long and successfully history together that is similar to the relationship between LEI and Shang-Wa. Sony responded by understanding the success of SanDisk and wanted to share the goal of providing leadership in high-performance electronic devices for professional video. "I am proud of the close cooperation we have had with Sony over the years, and I look forward to the exciting new products that SxS memory cards will enable" (Harari, E., 2007). Yutaka Nakagawa, Executive Deputy President and Corporate Executive Officer of Sony Corporation, said "Sony has successfully collaborated with SanDisk Corporation in promoting the memory stick formats. I am delighted by today's joint announcement of this new technology, which expands our collaboration to a new area, the professional video market, offering great benefits to users in this field" (Sony.net, 2007). The outcome of the Sony's response to this issue with SanDisk was to work together and develop and offer a brand new product, at the same time continue its long-time business relationship. If LEI follows in the same footsteps as Sony, it too could become an electronics services industry leader.

Citigroup

On October 8, 1998, Citicorp and Travelers Group completed a merger,