Financial Ratio Analysis of Microsoft

CASH FLOW STATEMENT ANALYSISOver three geezerhood, net notes from operations has exceeded net income creating to a greater extent than enough interchange to coer describe depreciation amounts and normal commons stock hard currency dividends. This indicates that Microsoft burn support its cash needs with its operations and points to why the conjunction does not rely on borrowing. Account receivables increase two-fold each year, which indicates potential future growth. Also, deduction trends in legalise assets and liabilities demonstrate sustained increases in operating(a) assets and decreases in operating liabilities. inception repurchase has been to a greater extent than doubled since 2004. This could possibly be because of undervaluation issues or an effort to boost Microsoft?s P/E ratio. The astronomic net decrease in cash in 2005 skunk be entirely attributed to the abnormal jump in common stock cash dividends that year. In ?05, Microsoft paid 1400% more in dividen ds than the yearly average. There is no new(prenominal) epoch-making decrease in any other item for ?05 on the cash rise statement. Since ?04, Microsoft has steadily 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 come outments 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 less cash to invest because of losses or the money is being utilize elsewhere, such(prenominal) as stock dividends. COMPETITORSAdobe, Oracle, a nd CA, Inc. be Microsoft?s main competitors! . These companies are the biggest ones in the software application industry of applied information sector. 1. earnability Ratios good margin and ROIC are two ratios that relate the earnings of the community to capital that has been sacrificed for more than the company?s operating cycle. Profit margin is a measurement that portrays the effects... If you want to get a full essay, order it on our website: OrderEssay.net

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