Problem 6: Financial Statement Analysis

The Ratios below were calculated based in the 2021 10K for Microsoft. Comment on the companys liquidity, leverage, shareholder ratios, and accounting returns.

	2021	2020
current ratio	2.080	2.526
acid test ratio	1.899	2.331
AR Turnover	4.799	4.648
Inventory Turnover	23.055	1.498
Times Interest Earned	29.802	20.440
Debt/Equity	1.351	1.547
EPS	8.119	5.819
Dividend Payout	0.270	0.342
Dividend Yield	0.0082074	0.0098479
Price Earnings	32.853	34.711
Return on Assets (ROA)	0.193	0.158
Return on Shareholder	0.471	0.401
Gross Profit %	68.926%	67.781%