$$ highlight significant changes in the Income Statement.

$$ highlight significant changes in the Balance Sheet.

$$ explain why you think those changes happened. What do you think happened to the company? Why did those numbers change so much? Was their support or evidence listed or quoted in your explanation?

$$ highlighsignificant changes in the Income Statement.

$$ highlight significant changes in the Balance Sheet

$>$ explain why you think those changes happened. What do you think happened to the company? Why did those numbers change so much? Was their support or evidence listed or quoted in your explanation?

MICROSOFT CORPORATION

INCOME STATEMENTS

$($In millions, except per share amounts$)($Unaudited$)$

$202120202021$ Vertical Analysis $2020$ Vertical Analysis Varience

Revenue:

Product $$16,631$ $$15,80336\mathrm{.}70\%42\mathrm{.}53\%-5\mathrm{.}83\%$

Service and other $28,68621,35163\mathrm{.}30\%57\mathrm{.}47\%5\mathrm{.}83\%$

Total revenue $45,31737,154100\mathrm{.}00\%100\mathrm{.}00\%0\mathrm{.}00\%$

Cost of revenue: $0\mathrm{.}00\%0\mathrm{.}00\%0\mathrm{.}00\%$

Product $3,7923,5978\mathrm{.}37\%9\mathrm{.}68\%-1\mathrm{.}31\%$

Service and other $9,8547,40521\mathrm{.}74\%19\mathrm{.}93\%1\mathrm{.}81\%$

Total cost of revenue $13,64611,00230\mathrm{.}11\%29\mathrm{.}61\%0\mathrm{.}50\%$

Gross margin $31,67126,15269\mathrm{.}89\%70\mathrm{.}39\%-0\mathrm{.}50\%$

Research and development $5,5994,92612\mathrm{.}36\%13\mathrm{.}26\%-0\mathrm{.}90\%$

Sales and marketing $4,54714,23110\mathrm{.}03\%11\mathrm{.}39\%-1\mathrm{.}35\%$

General and administrative $1,2871,1192\mathrm{.}84\%3\mathrm{.}01\%-0\mathrm{.}17\%$

Operating income $20,23815,87644\mathrm{.}66\%42\mathrm{.}73\%1\mathrm{.}93\%$

Other income, net $2862480\mathrm{.}63\%0\mathrm{.}67\%-0\mathrm{.}04\%$

Income before income taxes $20,52416,12445\mathrm{.}29\%43\mathrm{.}40\%1\mathrm{.}89\%$

Provision for income taxes $192,2310\mathrm{.}04\%6\mathrm{.}00\%-5\mathrm{.}96\%$

Net income $$20,505$ $$13,89345\mathrm{.}25\%37\mathrm{.}39\%7\mathrm{.}85\%$

Earnings per share: $0\mathrm{.}00\%0\mathrm{.}00\%0\mathrm{.}00\%$

Basic $$2\mathrm{.}73$ $$1\mathrm{.}840\mathrm{.}01\%0\mathrm{.}00\%0\mathrm{.}00\%$

Diluted $$2\mathrm{.}71$ $$1\mathrm{.}820\mathrm{.}01\%0\mathrm{.}00\%0\mathrm{.}00\%$

Weighted average shares outstanding: $0\mathrm{.}00\%0\mathrm{.}00\%0\mathrm{.}00\%$

Basic $7,5137,56616\mathrm{.}58\%20\mathrm{.}36\%-3\mathrm{.}79\%$

Diluted $7,5677,63716\mathrm{.}70\%20\mathrm{.}55\%-3\mathrm{.}86\%$

$2."$

$2021"20202021$ Vertical Analysis $2020$ Vertical Analysis Varience

Assets

Current assets:

Cash and cash equivalents $$19,165$ $$14,2245\mathrm{.}71\%4\mathrm{.}26\%1\mathrm{.}45\%$

Short$-$term investments $111,450116,11033\mathrm{.}23\%34\mathrm{.}79\%-1\mathrm{.}56\%$

Total cash, cash equivalents, and short$-$term investments $130,615130,33438\mathrm{.}94\%39\mathrm{.}05\%-0\mathrm{.}11\%$

$"$ Accounts receivable, net of allowance for doubtful

accounts of $$536$ and $$751"27,34938,0438\mathrm{.}15\%11\mathrm{.}40\%-3\mathrm{.}24\%$

Inventories $3,4112,6361\mathrm{.}02\%0\mathrm{.}79\%0\mathrm{.}23\%$

Other current assets $12,95113,3933\mathrm{.}86\%4\mathrm{.}01\%-0\mathrm{.}15\%$

Total current assets $174,326184,40651\mathrm{.}97\%55\mathrm{.}25\%-3\mathrm{.}28\%$

"Property and equipment, net of accumulated

depreciation of $$52,469$ and $$51,351"63,77259,71519\mathrm{.}01\%17\mathrm{.}89\%1\mathrm{.}12\%$

Operating lease right$-$of$-$use assets $11,57511,0883\mathrm{.}45\%3\mathrm{.}32\%0\mathrm{.}13\%$

Equity investments $6,3935,9841\mathrm{.}91\%1\mathrm{.}79\%0\mathrm{.}11\%$

Goodwill $50,45549,71115\mathrm{.}04\%14\mathrm{.}89\%0\mathrm{.}15\%$

Intangible assets, net $7,7947,8002\mathrm{.}32\%2\mathrm{.}34\%-0\mathrm{.}01\%$

Other long$-$term assets $21,10315,0756\mathrm{.}29\%4\mathrm{.}52\%1\mathrm{.}78\%$

Total assets $$335,418$ $$333,779100\mathrm{.}00\%100\mathrm{.}00\%0\mathrm{.}00\%$

Liabilities and stockholders' equity

Current liabilities:

Accounts payable $$14,832$ $$15,1634\%5\%-0\mathrm{.}12\%$

Current portion of long$-$term debt $3,2498,0721\%2\%-1\mathrm{.}45\%$

Accrued compensation $6,89410,0572\%3\%-0\mathrm{.}96\%$

Short$-$term income taxes $6,2722,1742\%1\%1\mathrm{.}22\%$

Short$-$term unearned revenue $38,46541,52511\%12\%-0\mathrm{.}97\%$

Other current liabilities $10,81611,6663\%3\%-0\mathrm{.}27\%$

Total current liabilities $80,52888,65724\%27\%-2\mathrm{.}55\%$

Long$-$term debt $50,03950,07415\%15\%-0\mathrm{.}08\%$

Long$-$term income taxes $25,71527,1908\%8\%-0\mathrm{.}48\%$

Long$-$term unearned revenue $2,5502,6161\%1\%-0\mathrm{.}02\%$

Deferred income taxes $2121980\%0\%0\mathrm{.}00\%$

Operating lease liabilities