IBM reported a 3 percent increase in income for its first quarter of 2000, beating analysts' estimates. But it also reported a decline in revenue. Its stock price dropped in response to the report. What explanation would you give for the drop in stock price on an earnings increase? What is your prediction of the change in IBM's asset turnover over the quarter?
IBM reported a 3 percent increase in income for its first quarter of 2000, beating analysts' estimates. But it also reported a decline in revenue. Its stock price dropped in response to the report. What explanation would you give for the drop in stock price on an earnings increase? What is your prediction of the change in IBM's asset turnover over the quarter?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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IBM reported a 3 percent increase in income for its first quarter of 2000, beating analysts' estimates. But it also reported a decline in revenue. Its stock price dropped in response to the report.
What explanation would you give for the drop in stock price on an earnings increase?
What is your prediction of the change in IBM's asset turnover over the quarter?
Kindly answer the question with introduction and conclusion based on the concept of the question. Explain the answer properly considering the accounting aspect of it.
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