Luck

Written Case Analysis: Microsoft

Senior Investigative Paper

Presented in Partial Fulfillment of the Requirement for the

Bachelors of

Science Degree in

The Business and Economics Department

Johnson C. Smith University

By Jermaine Foster

Spring Semester 2014

Dr. Alfred Smith

Financial Ratios

Liquidity ratios

The current ratios tells you the relationship of current assets to current liabilities. The Current Ratios are the extent to which a firm can meet its short-terms obligation. How a company get their current ratios is the company take their current assets and divide them by their Current liabilities to figure out theirs company current ratios for that year. (Current Ratio, 2015) In 2013 Microsoft current assets was 71.24 and Microsoft current liabilities was 26.27 in 2013 that gave Microsoft current ratios 2.71 0.11 was higher than 2012 that was 2.60.

The Quick Ratios is the extent to which a firm can meet its short-term obligations without relying upon the sale of its inventories. This ratio is similar to the current ratio except that Inventory, Supplies, and Prepaid Expenses are excluded. This indicates the relationship between the amounts of assets that can be quickly turned into cash versus the amount of current liabilities. (Quick Ratios, 2015) How a company gets their quick ratios is the company takes their Current assets minus inventory for that year and divide it by their current liabilities for that year to come up with their Quick ratios for that year. The current assets for Microsoft in 2013 is 71.24 minus the 1.36 divide by current liabilities 26.27 that make Microsoft Quick ratios 2.66 in 2013.

Leverage Ratios

The Debt-to-Total-Assets Ratios is a leverage ratio that defines the total amount of debt relative to assets. This enables comparisons of leverage to be made across different companies. The higher the ratio, the higher the degree of leverage, and consequently, financial risk. (The Debt-to-Total-Assests, 2015) How...