Microsoft Corporation's June 30, 2012 10-K Annual Report.I need assistance with this;

After reading the Treacy and Sims article, follow these four steps to analyze the revenues of a company from management's perspective:

Identify a company that interests you.

Access the company's online financial statements (10-K Annual Report) via the SEC/Edgar Web site. If you do not have any specific company that interests you, use the Microsoft Corporation's June 30, 2012 10-K Annual Report found in the Resources.

Review the company's financial statements, paying close attention to the revenues and any corresponding notes and narratives.

Review the company's notes, analysis, and narratives that you can find relative to its revenues.

Using the information gathered from these four steps, answer these questions:

Where are the company's revenues coming from?

How would you interpret this in relation to the company's identified strategy if you were a manager?

What information do you think that you might have access to, as a manager of the firm, that an outsider would not?

Now look at the same information from a stockholder's viewpoint. Keep in mind that as a stockholder, you only have access to public documents and answer these questions:

What is your interpretation of the company's revenues?

Does this make you comfortable with your investment?

Read the Treacy and Sims article, "Take Command of Your Growth," in the Harvard Business Review

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INCOME STATEMENTS

(In millions, except per share amounts)
Year Ended June 30,		2012				2011				2010
Revenue		$	73,723			$	69,943			$	62,484
Operating expenses:
Cost of revenue			17,530				15,577				12,395
Research and development			9,811				9,043				8,714
Sales and marketing			13,857				13,940				13,214
General and administrative			4,569				4,222				4,063
Goodwill impairment			6,193				0				0
Total operating expenses			51,960				42,782				38,386
Operating income			21,763				27,161				24,098
Other income			504				910				915
Income before income taxes			22,267				28,071				25,013
Provision for income taxes			5,289				4,921				6,253
Net income		$	16,978			$	23,150			$	18,760
Earnings per share:
Basic		$	2.02			$	2.73			$	2.13
Diluted		$	2.00			$	2.69			$	2.10
Weighted average shares outstanding:
Basic			8,396				8,490				8,813
Diluted			8,506				8,593				8,927
Cash dividends declared per common share		$	0.80			$	0.64			$	0.52

See accompanying notes.

47

Table of Contents

PART II

Item 8

BALANCE SHEETS

(In millions)
June 30,		2012				2011
Assets
Current assets:
Cash and cash equivalents		$	6,938			$	9,610
Short-term investments (including securities loaned of $785 and $1,181)			56,102				43,162
Total cash, cash equivalents, and short-term investments			63,040				52,772
Accounts receivable, net of allowance for doubtful accounts of $389 and $333			15,780				14,987
Inventories			1,137				1,372
Deferred income taxes			2,035				2,467
Other			3,092				3,320
Total current assets			85,084				74,918
Property and equipment, net of accumulated depreciation of $10,962 and $9,829			8,269				8,162
Equity and other investments			9,776				10,865
Goodwill			13,452				12,581
Intangible assets, net			3,170				744
Other long-term assets			1,520				1,434
Total assets		$	121,271			$	108,704
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable		$	4,175			$	4,197
Current portion of long-term debt			1,231				0
Accrued compensation			3,875				3,575
Income taxes			789				580
Short-term unearned revenue			18,653				15,722
Securities lending payable			814				1,208
Other			3,151				3,492
Total current liabilities			32,688				28,774
Long-term debt			10,713				11,921
Long-term unearned revenue			1,406				1,398
Deferred income taxes			1,893				1,456
Other long-term liabilities			8,208				8,072
Total liabilities			54,908				51,621
Commitments and contingencies
Stockholders’ equity:
Common stock and paid-in capital – shares authorized 24,000; outstanding 8,381 and 8,376			65,797				63,415
Retained earnings (deficit), including accumulated other comprehensive income of $1,422 and $1,863			566				(6,332	)
Total stockholders’ equity			66,363				57,083
Total liabilities and stockholders’ equity		$	121,271			$	108,704

See accompanying notes.

48

Table of Contents

PART II

Item 8

CASH FLOWS STATEMENTS

(In millions)
Year Ended June 30,		2012				2011				2010
Operations
Net income		$	16,978			$	23,150			$	18,760
Adjustments to reconcile net income to net cash from operations:
Goodwill impairment			6,193				0				0
Depreciation, amortization, and other			2,967				2,766				2,673
Stock-based compensation expense			2,244				2,166				1,891
Net recognized gains on investments and derivatives			(200	)			(362	)			(208	)
Excess tax benefits from stock-based compensation			(93	)			(17	)			(45	)
Deferred income taxes			954				2				(220	)
Deferral of unearned revenue			36,104				31,227				29,374
Recognition of unearned revenue			(33,347	)			(28,935	)			(28,813	)
Changes in operating assets and liabilities:
Accounts receivable			(1,156	)			(1,451	)			(2,238	)
Inventories			184				(561	)			(44	)
Other current assets			493				(1,259	)			464
Other long-term assets			(248	)			62				(223	)
Accounts payable			(31	)			58				844
Other current liabilities			410				(1,146	)			451
Other long-term liabilities			174				1,294				1,407
Net cash from operations			31,626				26,994				24,073
Financing
Short-term debt repayments, maturities of 90 days or less, net			0				(186	)			(991	)
Proceeds from issuance of debt, maturities longer than 90 days			0				6,960				4,167
Repayments of debt, maturities longer than 90 days			0				(814	)			(2,986	)
Common stock issued			1,913				2,422				2,311
Common stock repurchased			(5,029	)			(11,555	)			(11,269	)
Common stock cash dividends paid			(6,385	)			(5,180	)			(4,578	)
Excess tax benefits from stock-based compensation			93				17				45
Other			0				(40	)			10
Net cash used in financing			(9,408	)			(8,376	)			(13,291	)
Investing
Additions to property and equipment			(2,305	)			(2,355	)			(1,977	)
Acquisition of companies, net of cash acquired, and purchases of intangible and other assets			(10,112	)			(71	)			(245	)
Purchases of investments			(57,250	)			(35,993	)			(30,168	)
Maturities of investments			15,575				6,897				7,453
Sales of investments			29,700				15,880				15,125
Securities lending payable			(394	)			1,026				(1,502	)
Net cash used in investing			(24,786	)			(14,616	)			(11,314	)
Effect of exchange rates on cash and cash equivalents			(104	)			103				(39	)
Net change in cash and cash equivalents			(2,672	)			4,105				(571	)
Cash and cash equivalents, beginning of period			9,610				5,505				6,076
Cash and cash equivalents, end of period		$	6,938			$	9,610			$	5,505

See accompanying notes.

49

Table of Contents

PART II

Item 8

STOCKHOLDERS’ EQUITY STATEMENTS

(In millions)
Year Ended June 30,		2012				2011				2010
Common stock and paid-in capital
Balance, beginning of period		$	63,415			$	62,856			$	62,382
Common stock issued			1,924				2,422				2,311
Common stock repurchased			(1,714	)			(3,738	)			(3,113	)
Stock-based compensation expense			2,244				2,166				1,891
Stock-based compensation income tax deficiencies			(75	)			(292	)			(647	)
Other, net			3				1				32
Balance, end of period			65,797				63,415				62,856
Retained earnings (deficit)
Balance, beginning of period			(6,332	)			(16,681	)			(22,824	)
Net income			16,978				23,150				18,760
Other comprehensive income:
Net unrealized gains (losses) on derivatives			255				(627	)			27
Net unrealized gains (losses) on investments			(390	)			1,054				265
Translation adjustments and other			(306	)			381				(206	)
Comprehensive income			16,537				23,958				18,846
Common stock cash dividends			(6,721	)			(5,394	)			(4,547	)
Common stock repurchased			(2,918	)			(8,215	)			(8,156	)
Balance, end of period			566				(6,332	)			(16,681	)
Total stockholders’ equity		$	66,363			$	57,083			$	46,175

See accompanying notes.

Microsoft Corporation's June 30, 2012 10-K Annual Report