Microsoft For Retirement : The Stock Market Game

Microsoft is traded on the NASDAQ stock market using the ticker symbol is MSFT. The current stock price as of October 14th 2015 is $46.84. The trading range over the past year has been between $39.72 and $50.05. The dividend rate is $1.44 and their yield is 3.06.

Microsoft has their dominance of the industry at stake. They could potentially come out on top if left to continue their current tactics. They are masterfully “marketing their products” and it is paying off for them (Love, 1997).

In the beginning of the stock market game I bought only stocks in only 5 different companies, those companies were all companies that I was familiar with. The five companies were Apple, American Eagle, Costco, Disney and Hershey. I bought Apple stock because who doesn’t think of Apple when they think of big companies with a lot of money.

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 is a multinational corporation of the United States; It specializes in developing, manufacturing, trading software licenses and supporting a wide range of computer related products and services.. In terms of revenue, Microsoft is the world's largest software maker. It is also called "one of the most valuable companies in the world".

Microsoft was founded in 1975, and is the worldwide leader in software, services, and solutions (Career). Microsoft is proud to offer great products and employ outstanding people. Previous Microsoft CEO, Steve Ballmer once said, “There are many things that are true about Microsoft. We have big goals, big dreams, and big aspirations for the future. We are both competitive with our products and in the way we attract and retain talent. For me, the most important factor is competition for talent, because I know our success comes from the people who work here” (Foley).

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 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.

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

Further, our strategy involved paying attention to current events and attempting to use them to generate a return. For example, Horizon Pharmaceuticals’ stock price took a nosedive after an October 19th New York Times article suggested that Horizon was attempting to thwart Express Scripts’ attempts to lower the price of prescription drugs. The decision was made to buy 100 shares of stock in Horizon when its price spiraled down to a measly $14.62 per share, as we expected Horizon would do something to stop the bleeding, and historically has been a pretty volatile stock. Horizon came back with a scorching rebuttal in an open letter later that day, spiking its stock price more than 30% on October 23rd, and by October 28th, this move landed us our greatest return of any stock that we purchased and held until the end of the period: 18% (see appendix).

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

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.

As Microsoft and the software industry grew, the computer hardware manufacturers no longer saw the opportunity to exploit Bill Gates= company, as they had done initially with BASIC, one of the first programs Microsoft