Microsoft Company Report

Only available on StudyMode
  • Download(s) : 167
  • Published : April 20, 2013
Open Document
Text Preview
Microsoft Company Report

April 4th, 2011

Abstract

Microsoft Corporation, a pioneer in technological advancements, has survived the worst

of the economic recession to turn exceptional profits. In the company’s relatively short history,

it has taken many strides to improve and further expand its global, economic, financial reach

through innovating technologies and enacting sound financial practices, since its beginnings in

1975. Microsoft has become to be known as a ‘blue-chip’ investment, through a wide assortment

of products available in many different markets, environmental and philanthropic endeavors.

Coupled with a strong global presence, Microsoft continues to be a driving force in today’s

market.

Company History

Initially started by Bill Gates and Paul Allen 1975, Microsoft started out as a simple

translator program between the BASIC programming language and an early microcomputer

produced by Micro Instrumentation and Telemetry Systems, or MITS. In its inaugural year in

1975, Microsoft’s gross income was $1 million (THOCP, 2010). Since then, the company has

gone on to produce cutting edge technologies. One example of this is Microsoft’s flagship

graphical user interface (GUI), Microsoft Windows. A graphical user interface is a type of

interface that allows a user to interact with pictures rather than text commands, like with its

hugely successful but now obsolete predecessor, MS-DOS. Released in 1985, the user interface

was an extension of the MS-DOS programming. After its publishing, Microsoft Windows

partnered with International Business Machines (IBM),

IBM’s personal computers (PC). It has since created its own line of highly successful personal

computers and various related products. Microsoft has led the way as the foremost personal

computer and technological company since its initial provocation.

Financial Standings and Forecast

Microsoft was able to go public in 1985, offering its initial public offer (IPO) at $21.00

per share. By the end of the trading day, the price of Microsoft’s stock, symbol: MSFT, had risen

to $28.00, raising $61 million dollars for the company (THOCP, 2010). Since the company

issued its IPO, Microsoft’s stock has had the archetypical fluctuations in the market, all the while

staying wholly positive and profitable. Despite recently hitting its lowest per share price of

$15.28 on March 13, 2009, due to the Great Recession, the stock has since doubled in value and

has been in a state of stabilization (Google, 2011). Standard and Poor’s (S&P) has rated

Microsoft’s credit rating as a AAA company, their highest rating, for both Foreign and Local

Long Term. In doing so, S&P deemed Microsoft’s outlook to be very stable with an extremely

strong capacity to meet financial commitments (S&P, 2011). In April 2010, Microsoft posted its

third-quarter profit fiscal report with profits in excess of $4 billion dollars, an increase of over $1

billion during the same period only a year prior. Also posting a revenue increase of 6% to $14.5

billion, taking into account the 8.764 billion outstanding stocks Microsoft has issued valued

Microsoft at $30 per share, their market cap stands at $262 billion (News.com.au, 2011). Market

capitalization, or “market cap” as it’s often referred to as, is the measurement of size of a

corporation. It’s equal to the outstanding shares of a publicly traded company multiplied by the

share price. Because owning stock represents ownership of a company, market cap may be a

representation of a company’s net worth and is a factor in its stock valuation (Market Cap,

2011).

In addition to Microsoft’s S&P rating and its increasing profit margins, the company

recently reported record breaking second-quarter revenue of $19.95 billion on Jan 27th, 2011 for

the quarter ending December 31st, 2010. Operating income, net income and diluted earnings per...
tracking img