Microsoft : A Global Technology Developer

They have expand their business from only on computer software and hardware to online search engine, home gaming devices and smartphone, those business are the popular business in the world, Microsoft is trying to adapt the new market.

Microsoft has grown into an enormous and powerful corporation by a combination of aggressive business practices and having written operating systems (DOS and Windows) for personal computers. From operating systems it branched out into other software which has, along with the operating system, become something of an industry standard.

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

Microsoft's stated mission statement is "to help people and businesses throughout the world realize their full potential." Arguably, a statement this vague provides so little sense of mission that it lacks value. That is the point. Microsoft cannot even uphold its own mission internally, given the gap between the company's potential and the company's output. That the company has no coherent, tangible sense of its own mission is a contributing factor to that failure. Consider the company's resources. As Clarke (2010) notes, it is not for lack of ideas that Microsoft has failed to innovate. The company has great people, highly-talented, educated and experienced. It has $66 billion in cash on its balance sheet and another $10 billion in long-term investments (MSN Moneycentral, 2012). Clarke (2010) notes that the company spends $9 billion per year on research and development. The potential for innovation at Microsoft, then, is tremendous, yet its output is minimal.

Microsoft's struggles might seem somewhat perplexing, given its stunning success with Windows and the fact that it seems to have pursued a 'related linked' diversification strategy of primarily concentrating on products 'linked' to technology. It has not acquired businesses that are fundamentally anathema to its core product. "Companies' implements related diversification strategies in order to achieve and

In 2007, total assets have increased significantly by 48% from 2006. Current assets are 86.62% of total assets in 2007, up from 84.33% in 2006. From the trend over the last 5 years (2003-2007), Cash and Cash Equivalents (CCE) have grown strongly by 175% while total current assets have grown significantly by 273% in the same period. This growth in current assets is also reflected in Apple’s Quick Ratio and Current Ratio which have improved marginally in 2007 to 1.83 and 2.36 respectively. Apple`s ratios are favorable compared to its competitors, e.g.

Long-term solvency for Ford Motor Company also appears to be strong. The company’s times interest earned ratio of 1.96 means that it can cover its interest charges on current debt issues almost two times over. This is a good sign that bankruptcy is not eminent and the company is solvent in the long-run. A higher debt to equity ratio means a company gets a larger portion of its financing from creditors than shareholders, though higher is a subjective measure and depends on the industry. (Wahlen et al, 2008) Automotive manufacturers tend to have debt to equity ratios above 2 because the industry is capital intensive. (Debt/equity ratio, 2014) Ford’s debt to equity ratio in 2011 was 10.89, far higher than the industry standard, potentially due to the circumstances of the time. The financial crisis of 2008 resulted in major financial bailouts across the automotive industry. These large levels of debt to the government would increase the debt to equity ratios of all companies that accepted the money.

Which company is performing better based on profitability ratios? Based on a comparison of the profitability ratios between Apple Incorporated and Microsoft Corporation, Microsoft is performing better than Apple. Microsoft’s profit margin is higher than Apple’s and did not experience the decrease that apple did. While Microsoft does have lower returns on assets and equity than Apple, Microsoft was more stable between 2012 and 2014, and did not suffer the same decreases in these ratios that Apple did. Since Microsoft increased their profit margin and was a more stable company, I would argue that it is the better company.

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 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 shown on Table 1 the figures for Operating Margin and ROA are high for Microsoft which indicates efficient use of their real assets. The firm’s biggest combined expense shown on their Income Statement is that of R&D and Sales and Marketing (like most technology firms). These essentially are assets that are not capitalised on the Balance Sheet but which generate huge returns for the firm and 3

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.

The long-term liquidity risk ratio such as LT debt/Equity, D/E, and Total Liabilities to Total Assets all show a decline from year 2005 due to the repayment of debts. The interest coverage ratio also shows a healthy number of 29.45 in comparison to the industrial average of 15.04 indicating a high ability to pay out its interest expense. Such a low relative risk is not surprising due to the nature of its business depending heavily in R&D development and large intangible assets.

Microsoft Corporation is one of the largest and most influential companies in the personal computer industry. It has won several awards for innovation, for their commitment to diversity, and for their flexible work arrangements. It has always been a leader in the market with regard to its compensation. With 80,0004 employees across the world, having more than $15 billion revenue, it is one of the biggest and best‐known technology companies in the world.

Microsoft Corporation is one of the largest and most influential companies in the personal computer industry. It has won several awards for innovation, for their commitment to diversity, and for their flexible work arrangements. It has always been a leader in the market with regard to its compensation. With 80,0004 employees across the world, having more than $15 billion revenue, it is one of the biggest and best‐known technology companies in the world.