The Company I Have Chosen Is Microsoft.

The company I have chosen is Microsoft. Here is a link to their 10k sec financial statement

Project Descriptions SEC 10-K Paper You will be asked to select a company that is publically traded. You must research and secure the SEC 10-K Annual Report for the most recent year. This is often available at the company web site. Look for "Investor Information" or "Company Information". Save the file to your computer for access. There is no need to print as the report is usually 100 pages or more.

Post the name of your company in the SEC 10-K company for my approval in the week 1 Discussion. Each student must select a different company so read the company names selected by classmates. You will use this company for discussion in the discussions during the semester.

You will write a 2 - 3 page paper, single spaced, one inch margins, 12 pt font, with double space between paragraphs. Your paper should comment on the financial statements for your company as they relate to the information presented through week 5 material for our class, including the notes to the financial statements. Use headings in your paper such as Accounts Receivable and Inventory (topics from our textbook; other examples would be Balance Sheet and Income Statement). Please keep your paper to no more than 3 pages. The report will be submitted after week 5 material on Property, Plant and Equipment (PPE). Do not consider material from weeks 7 and 8 in your paper.

Take care to avoid academic dishonesty. Write your paper, read it, and edit. Use your own words. Please include a brief introduction of your company as well as a conclusion/summary at the end. Include the Income Statement and Balance Sheet as an attachment to your report (you can cut and paste directly from the 10-K report).

APA style is required for citations and a reference list. Use your own words. The reference list is most important! Ask questions if any of the requirements are unclear.

Additional guidance for your paper and resources: Page count does not include title page, tables and exhibits, table of contents, and reference list. Please include a title page (include your name on the title page). Include a reference list (business classes use APA format). Include in text citations (business classes use APA format). Your paper should use one-inch margins on all sides, with font set at 12 point. Take care to comply with the UMUC policy for academic honesty. Write your paper, in your own words, using accounting words from our textbook and explaining how these relate to the financial statements of your company. Our discussion postings during the semester should assist you in completing this paper. Visit the Accounting Toolbox in the Course Content of our LEO classroom. The Accounting Toolbox is a constant resource in our UMUC undergraduate accounting courses. Links and explanations to assist you with this paper may appear in this resource. Additional information will be posted in the Week 1 Discussion area of Leo Classroom. Review carefully and ask questions if you have any.

SEC 10-K Power Point Presentation: You will also be required to prepare a brief power point file of no more than 10 slides. Post the power point presentation in the discussion area for comments by other students. After you read the comments you may wish to make changes to your power point file before submitting it in the assignment folder along. Include a reference list in APA format. Ask questions if any of the requirements are unclear. You are required to post comments on the work of at least one other student who does not yet have comments so everyone has at least one set of comments. Do not wait until the last day to post your power point file so everyone has a chance to visit the files.

Paper For Above instruction

Microsoft Corporation is a global technology leader known for its software products, hardware devices, and cloud computing services. Founded in 1975 by Bill Gates and Paul Allen, Microsoft has evolved from a small startup into one of the world’s most valuable companies. Its primary offerings include the Windows operating system, Microsoft Office suite, Azure cloud platform, and various enterprise solutions. Microsoft’s commitment to innovation and technology has positioned it as a dominant player in the information technology industry, serving consumers, businesses, and governments worldwide.

Introduction

The purpose of this paper is to analyze and understand Microsoft’s financial statements through the lens of accounting principles and concepts discussed in our coursework up to week 5. Specifically, this paper examines key elements from Microsoft’s most recent SEC 10-K report, focusing on the Balance Sheet, Income Statement, and notes to the financial statements. The goal is to interpret how these financial reports reflect the company’s financial health, operational efficiency, and adherence to generally accepted accounting principles (GAAP).

Analysis of Financial Statements

Balance Sheet

Microsoft’s Balance Sheet provides a snapshot of its financial position at the end of the fiscal year. Assets are categorized into current and non-current, with cash and cash equivalents, marketable securities, and receivables forming the core of current assets. Long-term assets include property, plant, and equipment (PPE), intangible assets, and goodwill. Notably, Microsoft’s substantial cash reserves and short-term investments indicate strong liquidity, essential for operational flexibility and strategic acquisitions.

Assets and Liabilities

The company’s total assets are balanced by liabilities and shareholders’ equity. Current liabilities primarily include accounts payable, accrued expenses, and deferred revenue, which are crucial for understanding operational liabilities. Non-current liabilities include long-term debt and lease obligations. Microsoft’s high level of shareholders’ equity reflects retained earnings and comprehensive income, illustrating its profitability and reinvestment strategies.

Notes to Financial Statements

The notes provide detailed disclosures about accounting policies, contingencies, and additional financial information. For example, Microsoft discloses its revenue recognition policies, valuation of goodwill and intangibles, and lease commitments. These notes are instrumental in understanding the assumptions and estimates underlying the reported figures, ensuring transparency and compliance with GAAP.

Income Statement

Microsoft’s Income Statement reveals a robust revenue stream driven by cloud services, software licensing, and hardware sales. The gross profit margin remains healthy, showcasing efficient cost management. Operating expenses include research and development, sales, and administrative costs, which are significant but aligned with growth strategies. The net income underscores strong profitability, supported by high-margin cloud products and services.

Accounts Receivable and Inventory

Accounts receivable reflects the company’s credit sales and effective collection processes, vital for cash flow management. Microsoft’s accounts receivable balance is manageable relative to revenue, demonstrating efficient credit policies. Inventory consists mainly of hardware products, which are inventoryed to meet customer demand and support sales initiatives. The notes detail inventory valuation methods and obsolescence provisions, critical for accurate asset valuation.

Conclusion

In summary, Microsoft’s financial statements depict a financially healthy and well-managed enterprise. Its substantial liquid assets, high profitability, and prudent disclosures suggest sound financial practices and strategic foresight. The insights derived from the notes and detailed account analysis reinforce the importance of transparency and compliance in financial reporting. This analysis not only enhances understanding of Microsoft’s current financial position but also underscores the relevance of core accounting principles in interpreting real-world financial data.

References

  • Microsoft Corporation. (2023). Annual Report on Form 10-K. U.S. Securities and Exchange Commission. https://www.sec.gov/
  • Gibson, C. H. (2021). Financial reporting and analysis (14th ed.). Cengage Learning.
  • Wild, J. J., Subramanyam, K. R., & Halsey, R. F. (2019). Financial statement analysis (12th ed.). McGraw-Hill Education.
  • Revsine, L., Collins, D., Johnson, W., & Mittelstaedt, F. (2020). Financial reporting & analysis (8th ed.). Pearson.
  • Penman, S. H. (2021). Financial statement analysis and security valuation (6th ed.). McGraw-Hill Education.
  • Schipper, K. (2020). Principles of financial accounting. Harvard Business School Publishing.
  • Harvard Business Review. (2022). How to analyze financial statements. https://hbr.org/
  • Financial Accounting Standards Board. (2022). GAAP overview. https://fasb.org/
  • U.S. Securities and Exchange Commission. (2023). EDGAR database. https://www.sec.gov/edgar/searchedgar/companysearch.html
  • FASB. (2022). Accounting standards codification. https://asc.fasb.org/

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