Balance Sheet For Microsoft Corporation Accounting Essay

Microsoft is the most outstanding engineering corporation in the universe that deals with computing machines, ” With a one-year gross of more than $ 32 billion, Microsoft Corporation is more than the largest package company in the universe: it is a cultural phenomenon. The company’s nucleus concern is based on developing, fabrication, and licensing package merchandises, including running systems, waiter applications, concern, and consumer applications, and package development tools, every bit good as Internet package, engineerings, and services ”. [1] [2] [3] ”The name of the celebrated individual – Bill Gates comes in one ‘s head with reference to the name of Microsoft. He is the laminitis of the company and is believed to be the smartest coders of all time. ” [4] . Led by him, Microsoft had witnessed its flowers and has been able to hold its merchandise on about every personal computing machine in the universe, and in the procedure making criteria in the engineering industry every bit good as market re-definition. ”Gates was foremost exposed to computing machines at school in the late 60s with his friend Paul Allen. At 14; Gates and his friend were composing and proving computing machine plans. In 1972 they established their first company, Traf-O-Data, which sold a fundamental computing machine that, recorded and analyzed traffic information. His friend went on to analyze computing machine scientific discipline at the University of Washington and so dropped out to work at Honeywell, while Gates enrolled at Harvard. In 1975, Gates and Allen wrote a version of BASIC for the new Altair personal computer kit merely released by MITS Computer. Later that twelvemonth Gates left college to work full clip developing programming linguistic communications for the Altair, and he and Allen relocated to Albuquerque, New Mexico, to be close to MITS Computer, where Allen took a place as manager of package development. Gates and Allen named their partnership Micro-soft ”. [1]. The word Microsoft was developed from two different words, micro from a personal computer and soft from the package. The name was registered in New Mexico in November 1976. In November 1978, the first international office of Microsoft was established in Japan and its name was ASCII ( American Standard Code for Information Interchange ). It is now known as Microsoft Japan. In January 1979 the company’s central office was moved to Bellevue Washington. [5]. In the early 80s, Microsoft witnessed a period of great success when IBM contracted the company to develop an operating system for its personal computing machines ( Personal computer ), which was underway. In the late 80 ‘s Microsoft issued IPOs ( initial public offering ) of over two million portions and in the infinite of one twelvemonth, the monetary value or the portions tripled and in the procedure doing Gates a billionaire at about 30 old ages of age. Harmonizing to Richard B, McKenzie ( 2000 ) ”Microsoft bases accused of seeking to widen its market laterality by bear downing the lowest of all monetary values for its browser Internet Explorer ”. Nonetheless; the company had tons of other critics and legal instances against it from rivals and the likes. Microsoft’s success was further heightened by the tech bubble of 2000 following the release of the Windows XP, Windows 2000, the acquisition of Visio corporation which stood as the largest acquisition in the life of Microsoft so far with dealing value of about One and half a billion dollars. The company besides spread its tentacles into the universe of gaming with their popularly known X-BOX which has remained a success boulder clay day of the month. [1].
Description and Analysis of Microsoft Performance Overtime
Cardinal Dates

1975: Microsoft is founded by Bill Gates and Paul Allen; they sell BASIC, the first Personal computer computing machine linguistic communication plan to MITS Computer, Microsoft’s first client. 1981: Microsoft, Inc. is incorporated; IBM uses Microsoft’s 16-bit operating system for its first personal computing machine. 1982: Microsoft, U.K., Ltd. is incorporated. 1983: Paul Allen resigns as executive vice-president but remains on the board; Jon Shirley is made president of Microsoft ( he subsequently becomes CEO ); Microsoft introduces the Microsoft Mouse and Word for MS-DOS 1.00. 1985: Microsoft and IBM forge a joint development understanding. 1986: Microsoft stock goes public at $ 21 per portion. 1987: The Company’s first CD-ROM application, Microsoft Bookshelf, is released. 1990: Jon Shirley retires as president and CEO; Michael R. Hallman is promoted in Shirley ‘s topographic point ; the company becomes the first Personal computer package house to excel $ 1 billion of gross revenues in a individual twelvemonth. 1992: Bill Gates is awarded the National Medal of Technology for Technological Achievement. 1993: The Company introduces Windows NT. 1995: Bill Gates publishes his first book, The Road Ahead. 1996: The Company acquires Vermeer Technologies and its package application, FrontPage. 1997: The Justice Department alleges that Microsoft violated a 1994 consent edict refering licencing the Windows runing system to computing machine makers. 1998: The U.S. Department of Justice files two antimonopoly instances against Microsoft, avering the company had violated the Sherman Act. 2000: The Company acquires Visio Corporation, its largest acquisition to day of the month. 2001: Microsoft Windows XP is released internationally. 2003: Microsoft launches Windows Server 2003. 2007: Microsoft launches Windows view 2009: Microsoft launches windows 7 [1] Balance sheet for Microsoft Corporation as at 30th June 2010. ( Annually )

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Assetss [ + ] in Millions of Dollars
06/2010
06/2009
06/2008
06/2007
06/2006

Cash and Equivalents
5,505
6,076
10,339
6,111
6,714

Restrictable Cash




Marketable Securities
31,283
25,371
13,323
17,300
27,447

Histories Receivable
13,014
11,192
13,589
11,338
9,316

Loans Receivable




Other Receivables




Receivabless
13,014
11,192
13,589
11,338
9,316

Inventories, Raw Materials
2
170
417
435
465

Inventories, Work in Progress
16
45
31
148

Inventories, Purchased Components




Inventories, Finished Goods
552
502
537
544
1,013

Inventories




Inventories, Adjustments & A; Allowances




Inventories
740
717
985
1,127
1,478

Prepaid Expenses




Current Deferred Income Taxes
2,184
2,213
2,017
1,899
1,940

Other Current Assetss
2,950
3,711
2,989
2,393
2,115

Entire Current Assets
55,676
49,280
43,242
40,168
49,010

Land and Improvements
526
526
518
428
362

Buildings and Improvement
8,187
7,824
6,030
4,247
3,146

Machinery, Furniture and Equipment
7,546
6,732
5,996
4,691
3,715

Construction in Advancement




Fixed Assets, Other




Fixed Assets, Entire
16,259
15,082
12,544
9,366
7,223

Gross Fixed Assetss
16,259
15,082
12,544
9,366
7,223

Accumulated Depreciation
( 8,629 )
( 7,547 )
( 6,302 )
( 5,016 )
( 4,179 )

Net Fixed Assetss
7,630
7,535
6,242
4,350
3,044

Intangibles
1,158
1,759
1,973
878
539

Cost in Excess
12,394
12,503
12,108
4,760
3,866

Non-Current Deferred Income Taxes

279
949
1,389
2,611

Other Non-Current Assetss
9,255
6,532
8,279
11,626
10,527

Entire Non-Current Assetss
30,437
28,608
29,551
23,003
20,587

Entire Assetss
86,113
77,888
72,793
63,171
69,597

Liabilitiess [ + ] in Millions of Dollars
06/2010
06/2009
06/2008
06/2007
06/2006

Histories Collectible
4,207
5,008
4,034
3,247
2,909

Short Term Debt
1,000
2,000


Notes Collectible




Accrued Expenses




Accrued Liabilities
3,283
3,156
2,934
2,325
1,938

Deferred Gross
13,652
13,003
13,397
10,779
9,138

Current Deferred Income Taxes




1,557

Other Current Liabilitiess
4,005
3,867
9,521
7,403
6,900

Entire Current Liabilitiess
26,147
27,034
29,886
23,754
22,442

Long Term Debt
4,939
3,746


Deferred Income Tax
229



Other Non-Current Liabilitiess
8,623
7,550
6,621
8,320
7,051

Minority Interest




Capital Lease Obligations




Preferred Securities of Subsidiary Trust




Preferred Equity Outside Shareholders ‘ Equity




Entire Non-Current Liabilitiess
13,791
11,296
6,621
8,320
7,051

Entire Liabilitiess
39,938
38,330
36,507
32,074
29,493

Preferred Shareholder ‘s Equity




Common Shareholder ‘s Equity
46,175
39,558
36,286
31,097
40,104

Common Par
62,856
62,382
62,849

Additional Paid in Capital



60,557
59,005

Accumulative Translation Adjustments



149

Retained Net incomes
( 16,681 )
( 22,824 )
( 26,563 )
( 31,114 )
( 20,130 )

Treasury Stock




Other Equity Adjustments



1,505
1,229

Entire Capitalization
51,114
43,304
36,286
31,097
40,104

Entire Equity
46,175
39,558
36,286
31,097
40,104

Entire Liabilities & A ; Shareholder ‘s Equity
86,113
77,888
72,793
63,171
69

Closing monetary value = $ 25.51
Volume sold =25.16m [6].
The balance sheet above gives a brief sum-up of the plus and liabilities of Microsoft at a glimpse, it is evident that Microsoft has been able to keep plus at a greater proportion than liabilities overtime. The company has a good mix of debt and equity, for every $ 1 owned it is borrowing less than 90 cents. This shows that the company is non excessively leveraged and less hazardous while besides basking some degree of revenue enhancement shield from the purchase. Microsoft has a good opportunity to go on into a traveling concern in the nearest foreseeable hereafter because its capital construction shows more of residuary ownership. With more descriptive statistics, we can besides analyze the public presentation of Microsoft on a monthly footing from the twelvemonth 1988- 2009 utilizing returns ( unit % ) See excel for descriptive statistics.

Microsoft return ( unit % )
Market return ( unit % )

Mean 0.021622876
Mean 0.857870722

Standard Error 0.00618845
Standard Error 0.269942879

Median 0.022084196
Median 1.41

Manner 0.064221396
Manner 1.78

Standard Deviation 0.100359793
Standard Deviation 4.377737838

Sample Variance 0.010072088
Sample Variance 19.16458858

Kurtosis 1.421423202
Kurtosis 1.709578314

Lopsidedness 0.366537791
Lopsidedness -0.812673531

Scope 0.751310392
Scope 29.51

Minimum -0.343529412
Minimum -18.46

Maximum 0.40778098
Maximum 11.05

Sum 5.686816298
Sum 225.62

Count 263
Count 263

From the descriptive statistics above, Microsoft has a positive lopsidedness unlike the market whose lopsidedness is negative, this indicates that Microsoft has a better flow or return than the market. It could besides be noted that Microsoft is ( 1 ) criterion divergence off from its average whereas the market is ( 4 ) criterion divergence off from its mean, this means that the returns of Microsoft had non been excessively volatile over the old ages and return on stocks are less hazardous.
COMPARISON OF MICROSOFT PERFORMANCE WITH S & P 500 ( MARKET ) USING T-TEST
See t-test on table.
H0: Microsoft did non surpass the market
H1: Microsoft outperformed the market

t-Test: Paired Two Sample for Means
Variable 1
Variable 2

Mean
0.021622876
0.857870722

Variance
0.010072088
19.16458858

Observations
263
263

Pearson Correlation
0.539530773

Hypothesized Mean Difference
0

df
262

t Stat
-3.136067434

P(T<=t) one-tail
0.000953757

t Critical one-tail
1.650690284

P(T<=t) two-tail
0.001907515

t Critical two-tail
1.969059657

Decision: From the t-Test above, since the t-stats is greater in value than the t -critical ( irrespective of the -ve mark ), we need to accept the alternate hypothesis ( H1 ) which says that Microsoft outperformed the market and reject the Null hypothesis ( H0 ) which says that Microsoft did non surpass the market. We can besides deduce this decision by looking at the P-value, here we can see that the p-value is less than the significant degree of.05, therefore we need to accept the alternate hypothesis ( H1 ).
Analysis OF MICROSOFT PERFORMANCE WITH CAPM
Arrested development Statistics Multiple R 0.258985259 R Square 0.067073365 Adjusted R Square 0.063498933 Standard Error 0.185690508 Observations 263 Analysis of variance A df United states secret service Multiple sclerosis F Significance F Arrested development 1 0.647027164 0.647027164 18.764764 2.11102E-05 Residual 261 8.999531777 0.034480965 Entire 262 9.646558942 A A A A Coefficients Standard Error T Stat P-value Lower 95 % Upper 95 % Lower 95.0 % Upper 95.0 % Intercept -0.32415329 0.011530623 -28.1123831 6.17385E-81 -0.346858177 -0.30145 -0.34686 -0.30145 X Variable 1 0.011371441 0.002625088 4.331831484 2.11102E-05 0.006202393 0.01654 0.006202 0.01654 CAPM: – Tocopherol ( R ) =RF+I? [ RM-RF ]
By replacing the CAPM expression into the arrested development, we have Y= I±+I?x+e Y = dependant variable I± = intercept I? = co-efficient of independent variable vitamin E =error When x=0, I± is an estimation of Y, so an extra return of Microsoft would be given as:
Excess return= -0.32415329+0.011371441+0.185690508
Adjusted R Square = 0.063498933
The adjusted R Square indicates that 6.3 % of the variableness in the extra return of Microsoft is explained by the market. I.e. for every per centum alteration of return in the market, Microsoft’s return alterations by 6.3 %.
References

http: //www.fundinguniverse.com/company-histories/Microsoft-Corporation-Company-History.html
www.referenceforbusiness.com/history2/14/Microsoft-Corporation.html
www.redciencia.cu/empres/Intempres2000/Sitio/Principal/Conferencias/CUBA_Inteligencia%20Empresarial/victor/bcrc6.html
www.bighistory.net/microsoft-a-short-history/
http: //www.bighistory.net/microsoft-a-short-history/
www.answers.com/main/dsdata? dsid=2940 & A ; templateid=0 & A ; cid=27590212 & A ; qm_page=30703. Accessed, 4 April 2011

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