The corporation of my choosing is Microsoft. Microsoft is a company who empowers people through technology. With their platforms and tools, they help "drive small businesses productivity, large business competitiveness, and public-sector efficiency" (Microsoft). As they are trying to help people around the world improve their technology capabilities. With the investment they are putting into the cloud. They can go places and bring a digital world, wherever they go.

After reading the financial statements it seems to me that Microsoft using the indirect method for their financial reporting. Microsoft reports their net income and adjust their items "that do not affect cash" (Wild). This is due do the fact that they do not report any individual items "of cash inflows and cash outflows from operating activities" (Wild). Since Microsoft isn't a company that uses a lot of equipment to make their product. I would believe that there is no reason to show their operating activities. They make software for computers, very little machinery to do that. Having people invest in their company is more important than what machines they use to make their software.

All numbers are in millions.

Profitability:

Price Earrings Ratio = Common Shares over Earnings Per Share (262.52/8.05 = 32.6).

Dividend Yield = Cash Dividends Per Share over Market Price Per Share (.55/262.52 = .02%)

Liquidity:

Current Ratio = Current Assets over Current Liabilities (333,779/191,791 = 1.74)

Acid - Test Ratio = Cash Short-Term Investment + Current Receivable over Current Liabilities (14,224+116,110/191,791 = .68)

Solvency:

Debt-To-Equity Ratio = Liabilities over Equity (191,791/333,777-191,791 = 1.35)

Times Interest Earned = Income Before Interest Expense and Income Tax Expense over Interest Expense (71,102/2,346 = 30.3)

After reviewing the information, I have seen that Microsoft shares are a high price and they do not pay out to their share or stockholders a fair share. I believe that Microsoft can pay out more to there holders. The business isn't going anywhere, anytime soon.

For your responses, focus on the following questions: Do you agree with your classmates' responses concerning the importance of understanding the business as a first step in financial statement analysis? Explain. Compare and contrast the ratios that you calculated for your chosen corporation with those of your peers. Are the ratios similar or dissimilar? Expand on your assessment, explaining the reasons why they may or may not be similar taking into account the industry and market each corporation operates under. Support your responses to classmates with additional research and/or examples of your understanding of ratio analysis, comparison, and interpretation.

Be sure to post at least one reference in support of your explanations and conclusions. At a minimum, your initial post should include a link to your chosen corporation's Annual Report.