Financial Reporting Strategy

Capital; expenditures decline from 45.8% of revenues in 1995 to 10.8% of revenues by 2001 (also close to Microsoft’s experience);

Microsoft has developed into an inescapable force within the technological field. Coming from a delayed humble beginning, it has had to devote large sums of money to approach the levels of the founding technological companies. Today, Microsoft controls the market in computer software. How they have achieved this status is what some have come to question. Through “bundling” software programs, manipulating other computer companies, and packaging deals with personal computers, Microsoft has managed to eradicate nearly all competitors in the computer software market (Love, 1997). This near monopoly affects the entire spectrum of classes, including the consumer, other networking providers,

The company’s decision to defer revenues came at a time of significant growth in revenues—suggesting that the company’s decision to defer revenues was partially to dampen or “smooth” the company’s revenue growth. The company’s decision to defer revenue had the effect of reducing reported revenue growth from 88% to 64% in the first quarter of 1996 and increasing revenue growth from 4% to 15% in the first quarter of 1997. Even as reported the first quarter of 1997 represented the lowest quarterly revenue growth in the company’s history. While the timing of the company’s decision to defer revenues appears particularly opportune, the introduction of Windows 95 to the market provides a legitimate reason for the decision. As described in the case, the company expected to integrate its Internet technologies into both Windows 95 and Office 97 “at no additional cost to customers.” Arguably, then, sales of these products were improved by these

As part of the "Final Judgement", Microsoft was prohibited from entering into agreements allowing them to fine OEM's for using

Briefly speculate as to why Microsoft chose to expense all software costs as incurred rather than capitalizing a portion of these

* Microsoft has retained $18.9 billion in earning over the years. It has over 2.5 times that amount in stockholder equity ($47.29 billion), no

Microsoft is in an industry that makes it more difficult to apply DuPont analysis averages to determine its financial health. Microsoft obviously operates

Commencing in 1990, Microsoft was investigated and then charged with violation of the Sherman Antitrust Act which governs United States businesses. The company was determined to be a monopoly, and one which used anti-competitive practices to keep its leading edge on the market. As would most any organization on the receiving end of the allegations, Microsoft did not agree with the charges and sought to defend its business

in the most part, states that Microsoft is truly dismantling the competitive market. IBM and Apple created OS/2 and the Mac OS, respectively. Because of this “barrier of entry,” these top companies have not been able to “compete effectively with

Over the 5 years, Morrisons’s PTY/MV ratio averaged 1.172 while its BV/MV ratio averaged 0.774. The BV/MV ratio is an indication of the disparity between the market value and book value of a firm’s assets. Hence, as Morrisons’s BV/MV ratio is less than 1, it indicates that the corporation is valued at a premium by the stock market. Conversely, Morrisons’s PTY/MV ratio, being greater than 1, suggests that the CRE portion of its assets has suffered from an undervaluation by the stock market.

Exhibit 6, 8, and 9 (figures in $ millions) provides selected balance sheet items for Ford, General Motors, and DaimlerChrylser. The given information indicates that Ford carries the highest amount of cash and marketable securities among the three companies. In 1999, Ford had $25,173 of cash and marketable securities while General Motors and Daimler-Chrylser have only $12,140 and $9,163. Comparing at an industry level, we as a team

Microsoft’s primary operations has been developing and manufacturing of the software products. As a company, it has shown a very stable growth in terms of revenues and profits, thus enabling better than industry share price increase over more than a decade (1986-1999). With respect to the primary operation of software development and the task to financial reporting the two areas that were required to be established were –

Microsoft Corporation is a public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions. Established on April 4, 1975 to develop

As the most widely recognized company in the world, Microsoft dominated the home computer operating system market with MS-DOS and Microsoft Windows, a graphical extension for MS-DOS in 1980s.The company was founded by Bill Gates and Paul Allen and went public on March 13th, 1986 with the price of $25.75 per share. Since going public, the company’s performance kept being outstanding. Microsoft not only had a high level growth of revenue and operating income, but also achieved this growth in really short period. The net income of Microsoft always grew more than 15% compared to the same quarter in prior years. Thus, the stock price of the

The three statements that were provided in this section provide possible investors, competitors, and even those within the company with useful information to make important decisions that could affect their livelihood or the livelihood of Microsoft. Keep in mind that even though financial statements are a solid indicator of how a company is performing, one key principle about must be known when viewing them to make decisions. They do not always provide all of the information that you may need. There are usually underlying topics that could affect the company that are not necessarily showing up on their financial statements. These topics are discussed in other sections of this report on Microsoft.