Focused Company-Microsoft

To the best of your ability, explain the difference between your firms book value

(assets liabilities) and it's market capitalization (shares outstanding X market

per share). Stated differently, explain the difference between book value per

share and market value per share.

Note that this question requires that you understand how GAAP measures book

value and how equity markets price shares. Its a difficult question; please do

your best.

To understand book value, note that you will have to look at your firms history

of purchases of operating assets.

You will also need to think about sources of firm value that GAAP does not even

attempt to capture. What factors are capital markets building into share prices

that are not captured by GAAP?