StudentShare solutions
Triangle menu

Evaluation of Corporate Performance - Research Paper Example

Nobody downloaded yet

Extract of sample
Evaluation of Corporate Performance

Its Server and Tools division offers server software, training to developers, cloud-based services. Its Business division offers Microsoft Office and related products. The company markets its products and services across most part of the world. Income Statements (all figures in millions) Year ended June 30, 2011 2012 2013 2014 (projected) Revenue $ 69,943 73,723 77,849 85,634 Cost of Revenue $ 15,577 17,530 20,249 22,274 Gross Profit $ 54,366 56,193 57,600 63,360 Total operating expense $ 27,205 34,430 30,836 33,920 Income before income tax $ 28,071 22,267 27,052 29,940 Provision for income tax $ 4,921 5,289 5,189 5,689 Net income $ 23,150 16,978 21,863 24,251 Figures for the year ended 2014 has been arrived at by projecting 10% growth on revenues and cost of revenues. Income tax provision has been made in the same percentage as made in the current year to arrive at the net income after tax. Ratio Analysis Liquidity Ratios Liquidity of the company can be denoted by several kinds such as current ratio, quick ratio, cash ratio, and cash conversion cycle. a. Current Ratio is given as Current Assets/Current Liabilities For the year ended 2013, Microsoft’s current Ratio = 101,466/37,417 = 2.71 b. Quick Ratio This is also known as the acid-test ratio. This takes into account the most liquid current assets to cover current liabilities. Inventory and less liquid current assets that cannot be converted to cash quickly are eliminated while calculating this ratio. This informs more liquid status of the company. Quick Ratio = (Cash & Equivalents + Accounts Receivable + Short-term Investments)/ Current Liabilities = (3804 + 17,486+73,218)/37,417 = 2.52 Financial Leverage c. The debt-equity ratio is one of the popular financial leverage ratios that provides information regarding the company's leverage state. This is given as = total liability/shareholder's equity = 63,487/78,944 = 0.8 This indicates that for every single dollar of share holder’s equity, there is 0.8 dollar of debt. d. Debt Ratio Debt ratio is defined as total liabilities/total assets For Microsoft, it is calculated as 63,487/142,431= 0.45 In other words, 45% of the assets of Microsoft have been created from debt funds. Asset Management The return on assets employed in the company will provide information about how assets are used to generate return for shareholders. e. Return on Total Assets It is defined as Net Profit/ total assets employed = 21,863/142,431 =15.34% However, to understand how efficiently current assets are managed in enhancing shareholder’s wealth, it would be appropriate to find return on current assets. f. Return on Current Assets It can be given as net profit/current assets = 21,863/101,466 = 21.55% Profitability There are several measures of profitability and in this paper we calculate net profit margin and profitability against shareholder’s equity. g. Net Profit Margin is given as: Net profit/ revenue = 21,863/77,849 = 28% h. Profitability on shareholders’ fund It can be given as net profit/ total equity = 21,863/78,944 = 27.7% Market Value The market value of the firm can be given by its market capitalization. i. Market Capitalization of Microsoft = No. of shares ? price/share = 8,328 ? 35.52 = $295.8 Billions j. Market Multiples (P/E) It will be interesting to understand P/E ratio in details. It is important to note that the closing price of any stock keeps fluctuating on daily ...Show more


Evaluation of Corporate Performance (Microsoft Corp) Introduction Microsoft Corporation (Microsoft) is in the business of developing, licensing, marketing and supporting software and hardware devices worldwide. The company began its operations a way back in 1975 as a small vendor to IBM…
Author : myrtlenitzsche
Evaluation of Corporate Performance
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the research paper on your topic
"Evaluation of Corporate Performance"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Corporate Governance
This research paper dwells upon the rule of corporate governance that works to ensure the accepted ethical standards are adhered to, and the best practices are maintained. Due to the high rate of alleged crimes by corporate officers, through abuse of power and high profile scandals, corporate governance has received attention in the recent years.
4 pages (1000 words) Research Paper
Performance management
One of the worst scenarios that the CEOs consider themselves to face is the need for demonstrating the ability to develop the required performances and skills of the employees through training and development programmes. Apart from that the HR roles are being scrutinised continuously in terms of developing strategies for enhancing the performances of the employees that can add value to the organisation’s objectives.
12 pages (3000 words) Research Paper
Corporate Communications Strategies
The increased interest of both scholars and academicians to the significance of effective corporate communication strategies within an organization: communication strategies which enhance the corporate strategy of an organization, has increased a focus on what kind of corporate communication strategies organizations use to communicate to its diverse stakeholders with different needs and expectations (Gupta, 2011).
11 pages (2750 words) Research Paper
Performance appraisal
Over the years performance appraisal (PA) has come under scrutiny even while Pettijohn et al (2001) describe it as the ‘job managers love to hate’. Performance appraisal systems cannot be free from criticism. Performance appraisals have administrative and motivational purposes but the results of such appraisal have been disappointing (Caruth & Humphreys, 2008).
3 pages (750 words) Research Paper
Comparision of the similarities and differences between Economic Value Added (EVA) and Residual Income as a measure of corporate performance
Two financial metrics can help investors in their decision making and selection process of potential investments are economic value added (EVA) and residual income. These two metrics are able to calculate the wealth and performance of a corporation better than other quantitative models that used dividends intrisectly in the valuation model.
3 pages (750 words) Research Paper
Performance Review Takes a Page from Facebook
This new trend will be discussed in detail in this paper. Formal performance evaluation is necessary even after regular conversations with people because informal communication might not be as effective as
4 pages (1000 words) Research Paper
Principles of Management
Such recognition or assessment should be continuous throughout the year (Dossenbach 14). Another measure that has been seen to improve employee performance is to conduct an informal and individual meeting with employees. This is to be done at the
5 pages (1250 words) Research Paper
Performance Evaluation & Competitive Benchmarking
This paper carries out an in-depth and critical evaluation of the level of services and competition between the “Trace” Restaurant and Taj Campton Place Restaurant, San Francisco. It does this by
7 pages (1750 words) Research Paper
Most of the customers valued these most and they seemed to have an impact on the level of satisfaction of the customers more compared to the others. The use of the system in relation to gathering, review and understanding of guest experiences provides results that are
5 pages (1250 words) Research Paper
Evaluation of Corporate Performance
These parts include decoration products, cabinet products, plumbing products, installing products and several special products segment. The plumbing products segment is concerned with the production of tab and shower systems, handheld
8 pages (2000 words) Assignment
Comments (0)
Click to create a comment
Let us find you another Research Paper on topic Evaluation of Corporate Performance for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
Join us:
Contact Us