Deloitte Accounting Insight Board

Satya Nadella is Microsoft CEO; he is only the third CEO in Microsoft’s history. Their headquarters are located at One Microsoft Way Redmond, Washington. Microsoft’s accounting cycle or fiscal year runs from July 1st to June 30th. The ending date of their latest year was June 30th 2015. Microsoft offers many products. They have around 10 different categories of products and services: windows, email and communications, office, cloud and online services, hardware and multimedia, servers, developer tools, internet and browsers, business solutions, games and entertainment. They are all computer, tablet, phone related service and products. Some major ones we know are word, excel, windows 8, Xbox, and office 365, just to name a few. Although I cannot find exact data on the main geographic area, I would assume the United States because it is a U.S. company. To add, Microsoft has subsidiaries in almost 120 countries all around the world. The United States is not its only geographic area. Microsoft uses an accounting firm named Deloitte and Touche LLP out of Seattle Washington as its independent accountants and their chief accounting officer is Frank H. Brod. In the 2014 annual report the auditors stated that

1. What are the factors that likely explain the difference between Microsoft’s market value of equity and its reported book value of equity?

1. This question addresses the effect of Microsoft’s software capitalization policy on its financial statements. Ignore any potential tax effects.

* Microsoft has retained $18.9 billion in earning over the years. It has over 2.5 times that amount in stockholder equity ($47.29 billion), no

Microsoft is in an industry that makes it more difficult to apply DuPont analysis averages to determine its financial health. Microsoft obviously operates

I have little to no experience with accounting let alone a program such as sage 50, the whole sage 50 experience has been intimidating due to fear of not being able to correct ruinous errors. In creating and setting up a brand new company was arduous at first since it is all new to me, however it became easier when completing the George Welding company, the most challenging for me was the data check the end where my accounts receivable and outstanding bills did not balance. The process to find the discrepancies took some time, looking at all the reports proved to be perplexing yet helpful and the answer to the problem.

QuickBooks and Sage 50 Accounting are both great options for small business accounting. These programs help manage business finances which can drastically save time that may have been spent creating Excel spreadsheets and more. However, while both programs are sufficient for small businesses, the programs differ based on what they can offer your company.

First of all I would like to say thank you for the opportunity given to me to elaborate in details why I choose to be one of the Deloitte Student Ambassador in MMU.

Attached is an Income Statement from 2005 to 2007 (Microsoft Corporation Annual Report, 2008). As you can see, revenues and net income have continued to increase over the years. Earnings per share have increased as well. This shows that Microsoft is in a good financial standing. This means they are able to pay their shareholders and increase what they

This report is issued in order to inform the public about Microsoft Corporation. We analyzed the profitability and liquidity of this company. In addition, we were able to provide recommendations for investments or credits in Microsoft for the best interest of the public.

Financial statements are frequently a key source of information for financial decisions and taking a look at Microsoft’s financial statements can help us decide certain things about the company. There are three different types of statements that will be discussed in this section. These include: the balance sheet, the income statement, and the statement of cash flows. They are discussed here in either the sense of quarterly or yearly statements and will be noted as so. All information has been derived from Yahoo Finance. (http://finance.yahoo.com)

Microsoft’s Financial Reporting Strategy Q1. What are the factors that likely explain the equity and its reported book value of equity? Question 1 2 3 4 5 6 1999 Market Capitalisation: USD 460 Billion Book Value: USD 28 Billion MVE more than 16 times of BVE! Factor 1 Question 1 2 3 4 5 6 Intangible Assets • BVE does not reflect certain intangible assets’ value such as brand, customer loyalty, and human capital – Likely to provide tremendous earnings growth in the future – Investors factor these into consideration during valuation Factor 2 Question 1 2 3 4 5 6 High Expected Growth (1985 to 1999) • Revenue: USD 140 Million to USD 20 Billion • Net income: USD 24 Million to USD 8

Microsoft has one of the most pervasive portfolios of software applications, services and products globally, equally effective in gaining and keeping customers in the consumer, small business and enterprise markets. The series of broad business models that comprise the company require intensive levels of governance, risk and compliance management (Ali, Green, 2012). Microsoft operates in over 160 different nations and needs to balance the many requirements of internal and external stakeholders while also meeting governance and compliance requirements globally. Balancing the three strategic priorities of governance, risk and compliance (GRC) requires intensive levels of stakeholder ownership, participation, support in addition to the precise defining of financial and strategic controls as well. GRC considerations are often managed at the board of director level where it is common to find frameworks designed to balance each area of GRC performance in conjunction with a series of analytics and metrics of performance to evaluate relative progress over time (Frigo, Anderson, 2009).

 an analysis of the company’s accounting policies that are likely to affect interpretation of its financial reports (at least 3 policies)

Over the years, Microsoft Corporation has been developing and supporting numerous software products for various computing devices worldwide. As stated by Liquori (2011), “[This] enables business innovation and helps builds the company’s competitive advantage” (n.d). Microsoft’s technical innovations and leadership in consumer and corporate markets has made it a formidable competitor in this information age (liquor, 2011). Throughout this paper, I will provide financial ratios analysis of Microsoft Corporation based on the available financial data for the last five years.