Microsoft, a global company in the informatics system, was founded in 1975 by two American students, Bill Gates and Paul Allen. Microsoft hires almost 80000 people in more than 100 countries. Its most important activity is to develop informatics system for computers with revenues worth 70 billion dollars and net profit almost 24 billion dollars in 2011. The corporate headquarters is in Redmond, near Seattle, USA. At the beginning, the first objective of Microsoft was to equip each family with a personal computer. Now, this objective is almost accomplished with 94% of personal computers working with Windows. However, Microsoft integrates into other domains like television with the American private channel MSNBC, social network, keyboard and entertainment products like Xbox and Zune.
In 1980, IBM outsourced to Microsoft the operating system of its PC (launch of MS-DOS). 1985 witnessed the launch of Microsoft 1.0 but it was a failure because of insufficient demand. The first commercial success was in 1990 with Windows 3.0, then 95, 98, NT, XP it was in 1986 after its introduction in the stock exchange that Microsoft became a famous global company. In 1996, Microsoft launched Internet Explorer. This browser was still used with explorer 8. It was a revolution for everybody because it was really useful. Then, Microsoft wanted to develop an activity in the video games market and decided to launch the Xbox in 2001 and the Xbox360 in 2005. These games console have market share of 26% and are still practiced by people from all around the world. In another way, Microsoft launched in 2006 the Zune MP3 player; however, it was not a success because Apple had captured most of the market share and garnered much popularity with iPod and iTunes. In 2007, the company experienced resounding success with the introduction of Vista and Office 2007. The following year, the company launched a takeover bid for Yahoo but it proved to be a failure.
[...] In the case of Microsoft, is far away to be a problem, because since 2008, the net treasury is approximately 4 times higher than working capital, maybe because Microsoft is dealing with immaterial products that don't necessitate heavy investment. financing their activity. Default risks: During the last couple of years, Microsoft struggle with the short term debt, until reaching zero in 2009. But it's not a sustainable situation, because short term debt is suitable to develop activity and deal with delay. As we have seen, the acid ratio is really high for a company, 2.56, this suggest that current liabilities are very low compared to the current assets. [...]
[...] The vast majority of Net Income comes from the Continuing Ops. Indeed, its share represents 82.47% of the Net Income. Vertical analysis from Balance Sheet: We can see that the most part of the total assets consists in current assets and in particular of short-term investments. Indeed, the current assets accounts for 69% of total assets. This share has slightly increased between 2009 and 2011. The total current liabilities represent 55.74% of the total liabilities whereas it stood for 65.47% the previous period. [...]
[...] It is an international company and therefore has large financial and real assets to enable it to cope with crises and financing needs immediate and in the long term. 2011 working capital + net Treasury net current assets change of value variation % 9094 37050 46144 16615 2010 7393 22136 29529 7283 2009 5802 16444 22246 8890 2008 3091 10265 13356 0,56266721 0,3273847 0,66561845 Using the net treasury and working capital, we can check the net current assets to verify our calculations. [...]
[...] It is highly higher than Microsoft. Apple has a greater operational efficiency. f) Integrated Analysis • • Operational Leverage: ROS x Asset Turnover = Financial Leverage: ROA x Asset Leverage = 2011 22,32% 2010 18,27% 2009 17,10% 2011 33,44% 2010 29,83% 2009 25,50% As Microsoft, Apple operational leverage and financial leverage are almost the same because it is also a huge company. Nevertheless, it compensated these multipliers by creating enough profit to distribute comfortable dividends. Page 20 sur 30 IBM Financial Statement IBM Income statement Period Ending Total Revenue Cos t of Revenue Gross Profit Operating Expens es Res earch Developm ent Selling General and Adm inis trative Non Recurring Others Total Operating Expens es Dec 31, 2010 Dec 31, 2009 Dec 31, 2008 99,870,000 53,857,000 95,758,000 51,973,000 103,630,000 57,969,000 46,014,000 43,785,000 45,661,000 6,026,000 20,683,000 - 5,820,000 19,775,000 - 6,337,000 23,386,000 1,153,000 - Operating Income or Loss 19,305,000 18,190,000 17,091,000 Incom e from Continuing Operations Total Other Incom e/Expens es Net Earnings Before Interes t And Taxes Interes t Expens e Incom e Before Tax Incom e Tax Expens e Minority Interes t Net Incom e From Continuing Ops Non-recurring Events Dis continued Operations Extraordinary Item s Effect Of Accounting Changes Other Item s 787,000 20,091,000 368,000 19,723,000 4,890,000 351,000 18,540,000 402,000 18,138,000 4,713,000 297,000 17,388,000 673,000 16,715,000 4,381,000 - 14,833,000 13,425,000 12,334,000 Net Income Preferred Stock And Other Adjus tm ents 14,833,000 - 13,425,000 - 12,334,000 - Net Income Applicable To Common Shares Currency in USD. [...]
[...] VII) Financial cash flow This part aims to evaluate the Microsoft's financial healthy. It should be clear that a company need to have a positive financial healthy in order to pay its creditors. The cash flow finances the company activities. Furthermore, we are going to look at different part of the cash flow issued of the operating investing and financing activities. All number in thousand, currency in USD. 2011 Net Income Cash flow activities: from operating 23 150 000 2010 18 760 000 2009 14 569 000 Depreciations, amortization, and 2 766 000 other non cash items Adjustment to net income Accounts receivable Changed in operating liabilities Changed in inventories 4 081 000 (1 451 000) 206 000 (561 000) 2 673 000 2 562 000 1 979 000 (2 238 000) 2 702 000 (44 000) 241 000 24 073 000 2 084 000 2 215 000 (1 698 000) 255 000 (950 000) 19 037 000 Changed in other operating (1 197 000) activities Net Cash from operations 26 994 000 Page 24 sur 30 This part is focused on the net cash flow from operating activities. [...]
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