Microsoft Financial Statements and Financial Ratios Analyzed
🚀 Explore Microsoft’s 2022 Financial Narrative Like a Tech Guru! 📊
Microsoft 2022 Beginner’s Guide Introduction:
Hello, emerging finance enthusiasts! Are you prepared to unravel the financial intricacies of Microsoft in 2022? Dive into “Microsoft 2022: Beginner’s Guide to Financial Analysis,” presented by Quality Business Consultant and written by the insightful finance expert, Paul Borosky, MBA. This guide isn’t merely about numbers; it’s a deep dive into understanding the financial mechanics of one of the technology sector’s powerhouses!
Why You’ll Love This Guide:
- Expert Insights: 🎓 Traverse Microsoft’s 2022 financial terrain under the guidance of Paul Borosky, MBA, offered by Quality Business Consultant.
- Summary Financial Statements: 📉 Examine Microsoft’s income statements and balance sheets for 2022, gaining clarity on the company’s financial condition.
- In-Depth Ratio Analysis: 🧮 Tackle over twenty fundamental financial ratios to dissect Microsoft’s fiscal strategy and performance.
- Financial Terms Simplified: 📚 Our “In other words” segments distill complex financial terms into understandable and engaging explanations.
- Strategic Analysis Tips: 💡 Leverage Paul’s expert tips to enhance your prowess in financial analysis, beneficial for academic and career growth.
- Detailed Insights with Comprehensive Report: 🔍 Opt for our “Financial Analysis & Report” for an in-depth financial narrative of Microsoft, integrating AI insights with Paul Borosky’s analytical expertise.
Guide Highlights:
- A reader-friendly Legal Disclaimer
- An engaging Forward to spark your financial curiosity
- Detailed dissections of Income Statements and Balance Sheets for 2022
- A thorough investigation of Financial Ratios to boost your financial interpretive skills
- A repository of financial knowledge at your disposal!
Table of Contents Sneak Peek:
- Dissecting Income Statements: Analyzing revenue, operating expenses, and profit margins
- Unpacking the Balance Sheet: Evaluating assets, liabilities, and equity – the foundations of financial health
- Deciphering Financial Ratios: Arming you with the analytical prowess to assess Microsoft’s financial status
Who’s This For?
Tailored for ambitious business students and pioneering entrepreneurs, this guide is your key to mastering financial analysis with Microsoft as your focal point.
Elevate Your Financial Understanding:
Advance your financial literacy with “Microsoft 2022: Beginner’s Guide to Financial Analysis.” Transform intricate financial data into strategic business insights.
Additional Note: This beginner’s guide provides a robust foundation in key financial concepts, focusing on income statements, balance sheets, and essential financial ratios for their analysis. It offers a succinct overview of Microsoft’s 2022 financials, supplying specific data, calculations, and ratios for your analysis. While the guide furnishes you with the tools for financial investigation, the depth of analysis rests with you. For those seeking a detailed, company-specific financial review, our “Financial Analysis & Report” presents thorough insights, combining AI accuracy with Paul Borosky, MBA’s expert scrutiny.
Sincerely,
Paul, MBA.
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Microsoft: Brief Summary
Microsoft’s headquarters is located in Redmond, Washington. The company competes in the software infrastructure sector-specifically, the technology industry. At present, the organization employs approximately 160,000 individuals. Microsoft sells its products globally, with a heavy presence in the United States, Europe, Asia, and the Middle East. Their main revenue generators are software license sales, game sales, hardware, and cloud computing services.
From a financial perspective, Microsoft’s market capitalization is about $1.6 trillion. Their beta is .82. This indicates that the company’s stock is slightly less risky than the overall market. Its stock price range for the last 52 weeks has been between $132.52 to $232.86. In the last year, their dividend payout has increased moderately. At present, the dividend yield is 1.06%.
Microsoft Financial Report Sources
“Microsoft 2022 Company Analysis: Financial Statements and Financial Ratios: Defined, Discussed, and Analyzed for 5 Years” was written by Paul Borosky, MBA., and owner of Quality Business Plan. In this book, the author selected Microsoft’s 2018 10k, 2017 10k annual report, 2016 10k annual report, 2022 10k annual report, and Microsoft’s 2019 10k annual report as the basis for information gathering.
Section 1: Microsoft Income Statement Analyzed
Revenues:
Microsoft’s revenues in 2018 were $110.3 billion. In 2022, their revenues were $198.2 billion. On average, this is an annual growth rate of 15.8%. This trend indicates the organization is doing a decent job in growing yearly revenues. From an investor’s perspective, this is a good trend.
Analyst Grade: A
Microsoft 2021 Summary Income Statement | |||||
| Column1 | 2021 | 2020 | 2019 | 2018 | 2017 |
| Revenues | 168,088 | 143,015 | 125,843 | 110,360 | 89,950 |
| COGS | 52,232 | 46,078 | 42,910 | 38,353 | 34,261 |
| Gross Profit | 115,856 | 96,937 | 82,933 | 72,007 | 55,689 |
| SG&A | 25,224 | 24,709 | 23,098 | 22,223 | 20,020 |
| Depreciation | 11,686 | 12,796 | 11,682 | 10,261 | 8,778 |
| R & D | 20,716 | 19,269 | 16,876 | 14,726 | 13,037 |
| Other | – | – | – | ||
| Total Operating Expenses | 46,585 | 56,774 | 39,974 | 36,949 | 33,057 |
| EBIT | 69,271 | 52,959 | 42,959 | 35,058 | 22,632 |
| Other Income | – | – | – | – | |
| Interest Expense | 2,346 | 2,591 | 2,686 | 2,733 | 2,222 |
| EBT | 71,102 | 53,036 | 43,688 | 36,474 | 23,149 |
| Taxes | 9,831 | 8,755 | 4,448 | 19,903 | 1,945 |
| Net Income | 61,271 | 44,291 | 39,240 | 16,571 | 21,204 |
Section 2: Microsoft Balance Sheet Analyzed
For the Microsoft Inc. balance sheet, I again go through each important line item from the balance sheet. In reviewing each line item, I will define Microsoft’s balance sheet line item, such as cash, property, plant and equipment, and liabilities. Next, I then offer a summary analysis of Microsoft’s essential balance sheet line items.
Cash:
Microsoft’s cash holding in 2018 was $11.9 billion or 10.8% as compared to sales. In 2022, their cash was $13.9 billion, or 7% of sales. This trend indicates that the organization was able to decrease its cash position as compared to sales from the previously stated year. This decrease elevates Microsoft’s ability to utilize its cash for growth and other opportunities fully. From an investor’s perspective, this is a good trend.
Analyst Grade: A
Microsoft 2021 Summary Balance Sheet | |||||
| Column1 | 2021 | 2020 | 2019 | 2018 | 2017 |
| Cash | 14,224 | 13,576 | 11,356 | 11,946 | 7,663 |
| Short Term Investment | 116,110 | 122,951 | 122,463 | 121,822 | 125,318 |
| Account Receivable | 38,043 | 32,011 | 29,524 | 26,481 | 19,792 |
| Inventory | 2,636 | 1,895 | 2,063 | 2,662 | 2,181 |
| Other | – | – | – | – | – |
| Current Assets | 184,406 | 181,915 | 175,552 | 169,662 | 159,851 |
| Net PPE | 59,715 | 52,904 | 43,856 | 36,146 | 23,734 |
| Goodwill | 49,711 | 43,351 | 42,026 | 35,683 | 35,122 |
| Other | – | – | – | – | – |
| Total Assets | 333,779 | 301,311 | 286,556 | 258,848 | 241,086 |
| Accounts Payable | 15,163 | 12,530 | 9,382 | 8,617 | 7,390 |
| Accrued Expense | 10,057 | 7,874 | 6,830 | 6,103 | 5,819 |
| Accrued Taxes | 2,174 | 2,130 | 5,665 | 2,121 | 718 |
| Notes Payable | – | – | – | 9,072 | |
| LT Debt – Current | 8,072 | 3,749 | 5,516 | 3,998 | 6,280 |
| Other | – | – | – | – | – |
| Total Current Liabilities | 88,657 | 72,310 | 69,420 | 58,488 | 64,527 |
| LT Debt | 50,074 | 59,578 | 66,662 | 72,242 | 76,073 |
| Other | – | – | – | – | – |
| Total Liabilities | 191,791 | 183,007 | 184,226 | 176,130 | 168,692 |
| Common Stock | 83,111 | 80,552 | 78,520 | 71,223 | 69,315 |
| Treasury | – | – | – | – | – |
| Retained Earnings | 57,055 | 34,566 | 24,150 | 13,682 | 2,648 |
| Other | – | – | – | – | – |
| Total Equity | 141,988 | 118,304 | 102,330 | 82,718 | 72,394 |
| Total Equity & Liability | 333,779 | 301,311 | 286,556 | 258,848 | 241,086 |
Section 3: Microsoft Financial Ratios Analyzed
For this section, I have chosen several different financial ratios to review for Microsoft. In reviewing each of Microsoft’s financial ratios, I first define the financial ratio. Next, I supply the financial formula for calculating the specific ratio. Finally, I offer a brief analysis of Microsoft’s Important Financial ratios.
Microsoft Current Ratio
Microsoft’s current ratio is 2018 was 2.9. In 2022, their current ratio was 1.78. This trend indicates that the organization better aligns its current assets with its current liabilities. However, obtaining a current ratio of 1.0 would serve the firm better. From this, investors should consider this a good trend.
Analyst Grade: B
Microsoft Return on Assets
Microsoft’s return on assets (ROA) in 2018 was 6.4%. In 2022, their ROA was 19.94%. This trend indicates the organization is increasing the utilization of assets under management for revenue generation purposes. From an investor’s perspective, this is a good trend. Making more money with the same or fewer assets… Sweet!
Analyst Grade: A