Financial Ratio Analysis of Microsoft

CASH FLOW STATEMENT ANALYSISOver ternion years, winnings notes from operations has exceeded net income income creating to a greater achievement than enough exchange to coer draw off depreciation amounts and normal putting green breed cash dividends. This indicates that Microsoft cut support its cash inescapably with its operations and points to why the meeting of minds does not rely on borrowing. Account receivables increased two-fold all(prenominal) year, which indicates potential forthcoming growth. Also, demonstration trends in legitimate assets and liabilities essay sustained increases in operating(a) assets and decreases in operating liabilities. Stock repurchase has been more than doubled since 2004. This could whitethornbe be because of undervaluation issues or an bm to boost Microsoft?s P/E ratio. The vainglorious net decrease in cash in 2005 can be entirely attributed to the abnormal come out in common stock cash dividends that year. In ?05, Microsoft paid 1400% more in dividends than the periodic average. There is no new(prenominal) significant decrease in every other(a) item for ?05 on the cash flow statement. Since ?04, Microsoft has steady increased acquisition of other companies, which is typical of companies as large as Microsoft. This is also a good indicator of future growth. Microsoft?s purchase of investments has declined over the three years whereas the sale of investments has re primary(prenominal)ed relatively stable. In ?06, they sell more investments than they bought.

This may mean the society has slight cash to invest because of losses or the money is be utilize elsewhere, such as stock dividends. COMPETITORSAdobe, Oracle, and CA, Inc. are Microsoft?s main competitors. These companies are the biggest ones in the software application intentness of applied science sector. 1. earnability RatiosProfit bound and ROIC are two ratios that mention the earnings of the company to superior that has been sacrificed for more than the company?s operating cycle. Profit allowance account is a measurement that portrays the effects... If you penury to get a complete essay, order it on our website: Ordercustompaper.com

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