I attached my question in the word document ifMicrosoft does not work feel free to use another.

Financial Statements Analysis Directions Using the Annual Report of your selected company answer the following questions in the Discussion: What is the value of the company's inventory at year end? What was the amount of cost of goods sold for the year? What income statement format does the company use? Explain. Compute the company's gross profit percentage for the year end. Did the gross profit percentage improve, worsen, or hold steady? How does the company's gross profit percentage compare to the industry? What are the company's inventory turnover and days sales in inventory for the year end? Is there anything interesting to note about these ratios? If your company is a service company, please find a different company that would have inventory, perhaps a supplier to your selected company. Then answer the questions shown above. Be sure to state what company and supply a link to the information. You may use a service such as Yahoo Finance to help research industry averages. The notes to the financial statements will also be of use in answering the discussion questions. For many of the ratios in the discussion, you will need 2-3 years' worth of financial data. Name of the company: Microsoft Corporation Revenue( in millions) 2016 2015 2014 $85,320 $93,580 $86,833 2016 Net income (in millions) $16,798 2016 Average total assets (in $ 193,694 millions) 2015 2014 $12,193 $22,074 2015 $ 174,472 Return on assets= Return on assets 2016 2015 8.67% 6.99% The sector average return in the sector in which Microsoft Inc. operates in is 7.99 %. This therefore means that the firm has a higher return on assets of 8.67% compared to that of the industry. This implies that the firm is in a good competitive position. In regards to its competitors, it has good profitability. The industries in which the firm operates in are computer software, computer hardware, consumer electronics, and digital distribution. The average return on assets of consumer electronics and computer hardware are 13.70 % and 11.68 % respectively. This means that the performance of the firm is lower than that of its competitors. It should work towards improving their profitability. The firm is operating well as compared to the fiscal year 2015. The company's sales declined from 2015 to 2016 while the net income decreased. Despite the decrease in the net revenues, service revenues were reported to exceed 10% of the total revenue for the first time in fiscal year 2016. This means that service revenues is increasing but product revenues have declined. The firm has managed to expand its investments as seen by the increase in the firm's assets. The fact that returns on assets increased from 6.99% in 2015 to 8.67% in 2016 is an indication that the firm has increased its profitability. Microsoft Corporation has effectively used its increased average total assets to increase income. Sources 2016 annual report: https://www.microsoft.com/investor/reports/ar16/index.html (Links to an external site.)Links to an external site. http://csimarket.com/screening/index.php?s=roa (Links to an external site.)Links to an external site. Microsoft Microsoft is a multinational company that is headquartered in Washington and it manufactures and it sells computer software and electronics. The sector average return on assets of the industry in which Microsoft operates is 7.99% while Microsoft has an average of 8.67% as compared to the industry. This shows that Microsoft is in good competitive position as compared to some its competitors. In the year 2015; the company has a return on assets of 6.99% while in 2016 the return on assets was 8.76% which indicate an improvement and efficiency in the management of assets (Microsoft, 2017). What are adjusting entries and why are they necessary? Adjusting entries refers to the entries that are made at the final day in an accounting period which could be a month, a year or even a quarter. The adjusting entries are made so that the financial statements can reflect the revenues that have been earned and the expenses that have been incurred during the accounting period (Kimmel, 2016). Why adjusting entries are necessary. The adjusting entries are necessary because they help in; recording the revenue that has been earned but not recorded. They also help in recording the expenses that have been incurred but not yet been recorded. Their purpose is to ensure that the income statement and the balance sheet are accurate (Kimmel, 2016). The purpose of the adjusting entries is that they ensure that the income statement and the balance sheet is accurate. The adjusting entries also ensure that the profit or loss is recognized in the same accounting period in which it was incurred. Accounts that might require adjusting entries in Microsoft Depreciation accounts; the depreciation accounts may need adjusting entries so as to account for depreciation in the financial period. By adjusting the depreciation account it's possible to calculate the correct value of the net profit the fixed assets and the financial position (Kimmel, 2016). Revenue account- the revenue account also needs adjusting entries to account for the accrued revenues. The accrued revenue refers to the revenue earned but not yet received in cash. Unearned revenue adjustment help in giving the correct figure when it comes to the revenue and profits if the relevant accounting period: the adjusting entry increases the revenue and the account receivable by the amount of sale Stock/inventory account: the closing stock need adjusting to get the correct amount on the correct value of the cost of goods sold and the correct figure of the gross profit (Microsoft, 2017). The expenses accounts are also adjusted to account for the accrued expenses which are the expenses that have been incurred but not yet paid. The adjusting entry increases the expense account and the account payable (Kimmel, 2016). The doubtful accounts are also adjusted to allow for the allowance and for the doubtful accounts. This helps to properly account for the bad debt expenses. Why is it unethical not to record adjusting entries when required? It is unethical for the company to fail to record the adjusting entries when they are required since the company will fail to apply the accrual concept. The accrual concept requires a company to match the incomes and the expenses to the appropriate accounting periods (Kimmel, 2016). Failing to record the adjusting entries may understate or overstate the income in the accounting period and the financial position which may affect the decision making of various stakeholders. The investors, shareholders and even creditors may make decisions based on wrong information (Kimmel, 2016). For example if the adjusting entries are not made in Microsoft this may distort the business value and it may mislead the potential investors who may invest thinking that the company as more value than it's the case (Kimmel, 2016). What is the purpose of an adjusted trial balance? The adjusted trial balance refers to the trial balance in which the adjusting entries have been added. The purpose of the adjusted trial balance is to ensure that the adjusting entries were done correctly. It verifies the totals of the debit balances and the totals of the credit balances in all the accounts. It is used in constructing the financial statements including the balance sheet he statement of cash flows and statement of income (Microsoft, 2017). References Kimmel. (2016). Financial & Managerial Accounting. John Wiley & Sons. Microsoft. (2017). 2016 annual report: . Retrieved from https://www.microsoft.com/investor/reports/ar16/index.html (Links to an external site.)Links to an external site. Weygandt. (2010). Accounting principles. Issues in Accounting Education, 25(1), 179-180