Using the income statement, balance sheet, cashflow statements, and financial ra
ID: 2737187 • Letter: U
Question
Using the income statement, balance sheet, cashflow statements, and financial ratios applied in this link. http://www.nasdaq.com/symbol/msft/financials?query=income-statement Can anyone write a financial analysis including the following? Financial Statement Analysis: include: introduction; discussion of economy; summary of your firm's industry; financial analysis corresponding to headings among ratios (e.g., liquidity, activity, leverage, profitability, price), while discussing each part of your excel model - i.e., walk the reader through relevant portions of revenues, income statement, balance sheet, cash flow statement, and firm and peer firm ratios; and conclusion.
Explanation / Answer
Introduction:
Microsoft founded in 1975 is a worldwide leader in software services, devices and solutions that help people and businesses realize their full potential.It has operations in engineering segments and business segments.As of 2015 the Microsoft is dominant player in operating systems, is also producer of desktops and servers and is active in internet search and video game industry.
state of economy:
GDP of US economy increased at rate of 0.8% in Quarter I. There is a deterioration of exports and investment while private consumption the main engine of the economy continues to grow although at a slower rate.Consumer spending is likely to remain bouyant.Payrolls are growing less than expected and unemployment remains steady at 5%.GDP is expected to grow at 1.9% in US for 2016 and is expected to grow at 2.3% in 2017.
The Market cap and Income for Microsoft is way ahead of industry average. The company is overvalued with high PE,PB and PS ratios as compared to industry.The leverage is at par to industry at around 0.5 .Interst coverage is well below the average.Growth rate is moderate as compared to industry.
2006-06
The revenues for the firm has increased steadily over the years while the gross margin has deteriorated a bit mainly due to large expensive goods sold.Opearting income and margin have not shown any particular pattern,although income has increased while margin has deteriorated.The payout ratio has increased over the last year with steady increase in dividends while declining earnings over past two years. Cash flows have increased over the last 10 years.
The Net margin has declined over last three years due to declining profits relative to the sales.Return on Assets and Return on Equity have also deteriorated.
The leverage has increased with increasing D/E ratio over the past years.The liquidity position has improved over the last year with improving current and quick ratios.
Efficiency
Receivable T/o and inventory T/O have improved while Fixed asset T/O has declined. Days sales O/s ,Payables period and Days inventory has declined which shows improved activities for firm.
Market Cap Net Income P/S P/B P/E Dividend 5-Yr Rev Med Oper. Interest D/E Mil Mil Yield% CAGR% Margin% Coverage Microsoft Corp 3,80,682 10,481 4.5 5.1 37.3 2.9 8.4 32 24.7 0.5 Oracle Corp (USD) 1,58,642 8,901 4.5 3.4 18.6 1.6 0.8 37.4 8.8 0.8 VMware Inc (USD) 23,479 962 3.5 2.8 24.4 — 18.1 18.9 47.7 0.2 Cielo SA (USD,BRL) 21,877 3,594 6.3 10 20.6 1 22.7 47.3 5.8 1.3 CA Inc (USD) 13,028 783 3.3 2.4 17.6 3.2 -1.9 28.7 — 0.4 Citrix Systems Inc (USD) 11,945 373 3.7 5.8 32.7 — 11.8 13 8.1 0.6 Amdocs Ltd (USD) 8,181 407 2.3 2.4 20.7 1.3 4.1 13.9 164.4 — F5 Networks Inc (USD) 7,276 355 3.9 6.2 21.5 — 16.8 29.1 — — Industry Average 7,594 501 4.2 4.2 29.8 2 12.3 -3194.5 1508 0.6Related Questions
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