Question

Do dome financial   analysis (ratios) on Microsoft (MSFT) and convince the reader to invest in Microsoft. use financial analysis to support your recommendation.

Answer 1

MSFT , An Analysis

Microsoft coorporartion is a technology company with 144,000 employees all around , the company develop licsense ,and support a range of software product and service and device

The company's segment include productivity and business processes , intelligent cloud and more personal computing and the company product include operating sys tem , cross device productivity applications, server application, business solution application, desktop and server management tool and software development tool, video game with training and certification of computer system integraters and developers.

The company also design manufacturer and sell devices including personal computer , tablets , gaming, phones , other intelligent device and related accesories.

Over the years , microsoft doing well in this sector and showing increasing trend from past few years , so it is better for investor to invest in MSFT for future prospects.

There is operating margin taking average for 5 year shows 26.76% profitability ratio , whereas pretax margin is 36.67% ,compared to gross profit marginnis 65.90% as on june 30 , 2019 and also operatting profit margin on the same date will be 34.14 % and net profit margin on the same date will be 31.18%

If we compare return on investment , it will be study by two ratios

- return on equity on june 30, 2019 is 38.35%

- return on asset on june 30, 2019 is 13.69%

Over te past many years these all ratio showing increasing trend so it will be bertter for the investor to invest in this company to take advantage over high rate of return.

On june 30 , 2019 the debt ratio of MSFT are as

- debt to equity ratio 0.71

- compare to previous year 0.92

- debt to capital 0.41 comapre to 0.48 in previous year

- interst coverage ratio 17.27 % compared to 14.35 % in 2018 and 11.42 in 2017

- Financial leaverage is 2.80 compared to 3.13 in 2018 and 3.33 in 2017

This shows that financial leaverage decline over the year from 2017 to 2018 and to 2019.

Debt to capital ratio improved over the years

Debt to eqity ratio also impro