ANALYSIS OF ANNUAL REPORT

Analysis of Annual Report

Analysis of Annual Report

Background of the Company

Microsoft licenses, develops and manufactures, supports software products for many computing devices. (Ball, 2006) The company's software products consist of business solution applications, server applications, operating systems, software development tools, information related to the applications of worker productivity, and high-performance computing applications. The company also makes the MSN network of internet services and products. It primarily operates in the United States. The headquarters is in Redmond and employs approximately 89,000 people. The company recorded the revenues of $62,484 million during the financial year ended June 2010 (FY2010), and an increase of 6.9% over Financial Year of 2009. The operating profit of the company was $24,098 million in FY2010, showing an increase of 18.3% over the Financial Year of 2009. The company's net profit was $18,760 million in FY2010, showing an increase of 28.8% over Financial Year 2009.

Capital Raising Strategy

Microsoft tried to raise the capital by applying the strategy of offering the long-term debt securities. It made the strategy to offer 30, 10 and 5 year binds. It tried to look at the bigger picture understanding that the value of dollar will weaken down to several percent. If they can find investors to sell their bonds at a fixed rate while the long-term rate of interest is suppose to increase because the dollar sinks down, then they can invest money in just about anything they want.

Analysis of the annual report

Analysis of Annual Report

Strengths

The letter from the management was quite detailed description containing the information about their company's historical background. It has a profound explanation of the long stretches of the stable incremental improvement made by the company, including the waves of powerful changes and transformations. The letter also states the proper key events that made the company go through successes and failure of different products they launched. It also described about the progress the company has made starting from their first product till today and how they have captured the market with their innovations. The letter also gives details of its online operations and their new cloud computing innovations. The letter contains proper information about their product portfolio. It explains how the outstanding results reflect the strong product momentum across the entire company, and that the company has achieved double-digit growth in every business segment during the fourth quarter of fiscal 2010. In addition, the growth of their operating income shows that Microsoft has maintained a tight focus on controlling expenses.

The business section contains detailed information about the company's services and products, as well as the description of the major groups and division of the company and what they do.

The MD&A section show a descriptive analysis of the company's significant financial trends, the ups and downs and the increase and decrease in the revenues and the performance of different divisions during the past couple of years.

The income statement, financial statement and the cash flow statement provides thorough information about the revenue and ...