The Financial Performance of Microsoft

Topics: Revenue, Generally Accepted Accounting Principles, Income statement Pages: 3 (959 words) Published: May 15, 2011
The Financial Performance of Microsoft
In 2009, Microsoft felt the impact of the recession and the difficulties that all businesses faced in responding to one of the most challenging economic environments in the past 100 years. The fiscal 2010 was a year of remarkable accomplishments with record revenue earnings per share reported. Outstanding determination across all businesses, maintained a disciplined approach to controlling costs, and proved deep commitment to smart investments in technology innovation.

Since the company was created in 1975, Microsoft has created technology that transformed the way people worked, played, and even communicated all over the world. Their services and developments in hardware, and other solutions has opened new opportunities, greater convenience, and enhanced value to people’s lives. Microsoft profits from software licenses, and web based services like Bing, Windows Live, and Xbox Live services.

In reviewing the year performance from 2009 and 2010 it is clear that revenue increased. Microsoft had much success in 2010 with the release of Windows 7, as well as PC market improvements. Operating income increased reflecting the change in revenue, offset in part by higher operating expenses. Sales and marketing expenses increased $335 million. This could be expected because of the increased advertising and marketing of Bing and Windows 7. General and administrative expenses increased $304 million and cost of revenue increased $240 million, primarily reflecting increased online costs and charges resulting from the discontinuation of the KIN phone, offset in part by decreased Xbox 360 console costs and reductions in other costs due to resource management efforts. Research and development expenses decreased $296 million, because of a decrease in third-party development and programming costs and increased capitalization of certain software development costs. Microsoft year ending 2010 reflects 380 million shares repurchased,...
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