Executive Summary of Microsoft Corporation's Annual Report

2. For the most recent year, what is the amount of inventory in the balance sheet? What does this amount represent?

Item 7.|  |MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS|  | |25|  |

year 1 net income would do). Then, its year 2 opening net assets are $276.36,

1. What percentage of total assets consists of purchased intangible assets, net, at July 27th, 2013? At July 28th, 2013? What type of events triggered the existence of these intangible assets?

1. This question addresses the effect of Microsoft’s software capitalization policy on its financial statements. Ignore any potential tax effects.

Current and historical Financial Statements (Income Statement (I/S), Balance Sheet (B/S) and Statement of Cash Flows) from the three most current years for the firm

Microsoft is a highly diversified company. Its technologically-related products span from software to music players to game consoles to web browsers to search engines to phones. However, its flagship product, the product which has been the primary driver of its profits has been Microsoft Windows, the ubiquitous operating system that runs on virtually every computer in the world. Windows has been deemed so critical that even Microsoft's competitor Apple was effectively forced by market pressures to allow its Macs to run Windows, in an effort to boost sales. "As astounding as Apple's success has been, it hasn't put a dent in the Microsoft Office monopoly. [Current CEO] Ballmer and company still profit on every Macbook running Word, Excel and PowerPoint" (Greg 2012).But while Microsoft continues to make its highly profitable Windows products (despite industry criticism about its user features); it has struggled to diversify in its many critical areas, most notable in its music, phones, and Internet service.

This essay plans to focus on the corporate strategy of Microsoft, and show how Microsoft has used diversification successfully within their corporate strategy to gain a competitive advantage.

Balance Sheet: Assets, such as Cash and Cash equivalents are up over last year by $20.72 million dollars, whereas Short Term Investments where 0 at the end of 2013 they were slightly up to $1.12 by January 3, 2015. Other Assets shows a drop of $8.26 million dollars, mostly in Property, Plant and Equipment. Based on the 10-K report the balance sheet was in the thousands other web based financial reporting sites show the numbers to be in the millions. Upon further review of the Balance Sheet from the financial website “Watch” the break down in Property, Plant and Equipment shows the biggest difference in the Accumulated Depreciation. (Market Watch) The Vertical Ratio for 2014 Total Current Assets is 3% of the Total Assets and in 2013 was also 3%. The Horizontal Ratio for Total Asset were 37% reflecting a change from 2014 at $212.05 and 2013 $195.61 signaling a significant increase in 2014. The 2015 financial were not completed at the time of this report but the

Attached is an Income Statement from 2005 to 2007 (Microsoft Corporation Annual Report, 2008). As you can see, revenues and net income have continued to increase over the years. Earnings per share have increased as well. This shows that Microsoft is in a good financial standing. This means they are able to pay their shareholders and increase what they

Microsoft Corporation is an American global technology firm develops, manufactures, and sells computer software, electronics, and personal computers. The firm has its headquarters in Redmond, Washington. Bill Gates founded the corporation in 1975 to develop and sell necessary interpreters; it rose with time to become the dominant player in the computer operating system operating system it had its initial public offer (IPO) IN 1986. Its fast growth in the industry has enabled it to acquire Skype technologies in 2011 at the cost of $8.5 billion. The firm has plans to make more acquisitions this year. The profit margin of the company lies at US$16.79 billion.

This report is issued in order to inform the public about Microsoft Corporation. We analyzed the profitability and liquidity of this company. In addition, we were able to provide recommendations for investments or credits in Microsoft for the best interest of the public.

1994 Liabilities and Equity Short-term borrowings Accounts payable Progress collections and price adjustments accrued Dividends payable Taxes accrued Other costs and expenses accrued Current liabilities Long-term borrowings Other liabilities Total liabilities Minority interest in equity of consolidated affiliates Preferred stock Common stock Amounts received for stock in excess of par value Retained earnings Deduct common stock held in treasury Total shareowners’ equity Total liabilities and equity $644.9 696.0 1,000.5 72.8 337.2 1,128.1 $3,879.5 1,195.2 518.9 5,593.6 $ 71.2 $ — $465.2 414.5 3,000.5 $3,880.2 (175.9 ) $3,704.3 $9,369.1 $665.2 673.5 718.4 72.7 310.0 1,052.6 $3,492.4 917.2 492.1 4,901.7 50.1 — $463.8 409.5 2,683.6 $3,556.9 (184.5 ) $3,372.4 $8,324.2 $ $120.6 376.2 300.5 58.7 318.3 392.6 $1,566.9 364.1 221.0 2,152.0 41.4 — $455.8 266.9 1,384.5 $2,107.2 — $2,107.0 $4,300.6 1993 1985

Financial statements are frequently a key source of information for financial decisions and taking a look at Microsoft’s financial statements can help us decide certain things about the company. There are three different types of statements that will be discussed in this section. These include: the balance sheet, the income statement, and the statement of cash flows. They are discussed here in either the sense of quarterly or yearly statements and will be noted as so. All information has been derived from Yahoo Finance. (http://finance.yahoo.com)

in order to create possibly the most effective and versatile workforce of any corporation in existence. To study Microsoft's way of doing business is to look at the company from many angles, from a managerial and organizational standpoint to its process of developing products and services for its customers and its competitive environment. The purpose of this paper is to analyze Microsoft from a strategic fit