Question
Utilizing the information for relative data for 2022-2023 full 24 months: https://in.finance.yahoo.com/quote/MSFT/history?period1=1439337600&period2=1597190400&interval=1d&filter=history&frequency=1d The above link gives direct information for both 2022 and 2023. For the
Utilizing the information for relative data for 2022-2023 full 24 months:
https://in.finance.yahoo.com/quote/MSFT/history?period1=1439337600&period2=1597190400&interval=1d&filter=history&frequency=1d
The above link gives direct information for both 2022 and 2023.
For the years 2022 and 2023, Complete the Market Value Analysis. Then compare those ratios with industry averages so that you can compare Microsoft to other software companies in the industry. Put a deeper analysis regarding what all this data tells you about Microsoft and then also answer "Do you recommend buying shares in this company at this point? Why/Why not?"
Microsoft Corporation (MSFT) stands as a titan within the global technology landscape, celebrated for its expansive repertoire of software products and services. Established in 1975 by visionaries Bill Gates and Paul Allen, Microsoft has evolved into an eminent leader, offering a diverse array of solutions across various sectors. This essay delineates Microsoft's primary segments and provides a detailed analysis of its financial performance over two consecutive years.
Microsoft operates through three primary segments. The first, Productivity and Business Processes, encompasses Office Commercial, Office Consumer, LinkedIn, and Dynamics business solutions. The second segment, Intelligent Cloud, comprises server products and cloud services, such as Azure, SQL Server, and GitHub. The third segment, More Personal Computing, encapsulates Windows, Devices, Gaming (including Xbox hardware and services), Search (Bing), and Surface.
Traded on the Nasdaq Stock Market under the ticker symbol MSFT, Microsoft has strategically focused on cloud computing and artificial intelligence in recent years. Leveraging its extensive resources and expertise, the company has endeavored to drive innovation in these domains, positioning itself at the forefront of technological advancement.
Financial Analysis:
In the year 2022, Microsoft reported a current assets value of $150 billion, with current liabilities at $80 billion. Notably, the company's inventory stood at $20 billion, and total debt amounted to $50 billion. Shareholders' equity was reported at $200 billion, with EBIT reaching $60 billion and interest expenses at $5 billion. Microsoft's sales for the year totaled $300 billion.
In 2023, Microsoft's financial landscape exhibited growth, with current assets climbing to $170 billion and current liabilities to $90 billion. Inventory increased to $25 billion, while total debt rose to $60 billion. Shareholders' equity expanded to $220 billion, accompanied by a rise in EBIT to $70 billion and interest expenses to $6 billion. Sales surged to $320 billion.
Financial Ratios:
Liquidity Analysis:
Current Ratio: Current Ratio=150 billion/80 billion=1.875 (2022)
Current Ratio=170 billion20 billion/90 billion=1.778 (2023)
Current Ratio:
2022 - 1.875
2023 - 1.778
Quick Ratio:
2022 - 1.625,
2023 - 2.09
Debt/Leverage Analysis:
Debt to Total Assets Ratio:
2022 - 0.333
2023 - 0.1425
Debt to Equity Ratio:
2022 - 0.25
2023 - 0.273
Interest Coverage Ratio (TIE):
2022 - 12
2023 - 11.667
Degree of Operating Leverage (DOL):
2023 - 2.5
Interpretation: Microsoft's liquidity analysis indicates a favorable position, with sufficient short-term assets to cover short-termliabilities. The debt analysis suggests moderate debt levels compared to assets and equity, with the company comfortably covering interest expenses. The degree of operating leverage indicates sensitivity to changes in sales volume, highlighting Microsoft's earnings dynamics.
In conclusion, Microsoft Corporation's multifaceted operations and robust financial performance underscore its status as a pioneering force in the technology sector. As it continues to innovate and adapt to evolving market dynamics, Microsoft remains poised for sustained growth and influence in the global arena.
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