Prepare a brief discussion and analysis of this company in a report format that will contain the following sections:

Briefly discuss each companys financial position, is it good or bad and explain why (based on the income statement and the profitability ratios)?

Discuss MSFT and GOOG ratios compared to each other. Which company does better in some areas or all areas?

Based on your analysis, select which company had the best financial performance and support your conclusion.

The financial position of the Microsoft Corporation in 2023 was very strong. With the net profit margin of 34,273.18 compared to that with google indicates that the company has a better financial position to have a great capital and more of growth and expansion, given also that they would have a greater margin of financial safety. The fact that Microsoft ranks higher than Google in terms of their income statements and profitability ratios, it implies that Microsoft has a better track record of turning sales into profits or is more effective at doing so. In 2022, Google financial position was not doing well. As a result of their unfavorable low profitability ratios, the company lost out on chances to boost profits in line with its financial situation.

Liquidity ratio

Google had a higher current ratio (66.53%) than Microsoft (35.12%), indicating that Google had adequate cash on hand to cover its loans. In terms of net working capital, Microsoft was higher than Google, indicating that Microsoft assets continue to exceed its current liabilities. All in all, in comparison with the networking capital and current ratio Google has more ability to liquidate its liability, considering that the current ratio is half the percentage of that in Microsoft.

Efficiency and Working Capital Ratio

Accounts Receivable Days The lower the better.

Google is lower than Microsoft in terms of accounts receivable days, they only have 51.95 days compared to Microsoft which is 83.86 days showing that Microsoft's collection procedures are inefficient and that the company's payment terms may be excessively lenient, which could negatively impact cash flow and limit corporate expansion. When it comes to the Total Asset Turnover, Google is more efficient than Microsoft in generating sales or revenues from its asset base, as evidenced by the fact that it has a larger total asset turnover of 77.43 compared to that with Microsoft which is 51.44.

Leverage Ratio

Microsoft is lower than Google in terms of the debt to asset ratio. Microsoft having 27.01 compared to Google that is 31.15, shows that Googles assets are more likely to being financed by the debt of the company. Microsoft significant percentage of the companys funds came from their shareholders. As a result, creditors are therefore more likely to get payment from Microsoft. Google is lower than Microsoft in terms of their debt-to-equity ratio, that proves most of Microsofts financing came more from the companys debt than the companys equity, thus also saying that they have higher risk to lenders and investors because their growth usually comes from borrowing.

Profitability Ratios and Operating Returns

Net profit is when the higher is better and always great since the company generates profit from their sales and has an effective control in their costs in terms of providing goods and services at a price because it is higher than its costs. Microsoft has a higher net profit margin that is 34,415.77 than Google which is 21,203.10, implies that Microsoft is showing an effective cost management on their end and a high revenue generation. On the other hand, showing in the answer tables that Microsoft has higher Return of Assets this only indicates that the company is efficient on their assets utilization that leads the company to generate profits. Meanwhile, Microsoft has the upper hand on the Return of Equity in the companies involved in the ratio. This provides information that signifies effective use of the company's equity capital to generate profits in Microsoft. It shows how well Microsoft managing its capital that shareholders have invested to their company.

Valuation Ratio

Price to Earnings Ratio The lower the better.

Google has 21.06% of Price to Earnings ratio which is lower than Microsoft that is about 34.16%, which indicates that it pays less for each dollar of earnings than it receives. Also, the average of a P/E ratio is around 20 to 25, showing that Microsoft have worse than of the average, and indicates that their prices must be expensive than Google. Given that they represent more established organizations with often longer company histories and have a bigger market capitalization than Google, Microsoft is frequently a safer bet for investment.

Based on our analysis, the company that has the best financial performance is ? And why?