Microsoft Corporation - Financial Statements and Supplementary Data
Autor: suddz989 • July 2, 2018 • Case Study • 2,183 Words (9 Pages) • 539 Views
Microsoft Case
Answer the following questions using the financial statements below.
- What is the amount charged as an expense during 2012 relating to stock options granted to employees (ignore the impact of income taxes)? Which accounts are impacted by this transaction?
$2244 – Stock based compensation expense
- What is the net amount of gains/losses incurred during 2012 that have not been recorded in the income statement for that year?
($441) – “Other Comprehensive Income” (On Equity Statement)
- How much did the company spend to acquire it common stock during 2012?
$1,714 + $2,918 = $4,632MM (On Equity Statement)
- Explain the impact the of repurchasing its common stock had on Return on Equity (“ROE”) during 2012, cite the company’s 2012 ROE and calculate ROE assuming the common did not make these purchases during 2012.
Net Income / Shareholder Equity = ROE
So, if shareholder’s equity goes up (as it would w/out repurchase), the ROE would decrease.
MICROSOFT CORPORATION
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INCOME STATEMENTS
(In millions, except per share amounts) |
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Year Ended June 30, |
| 2012 |
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| 2011 |
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| 2010 |
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Revenue |
| $ | 73,723 |
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| $ | 69,943 |
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| $ | 62,484 |
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Operating expenses: |
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Cost of revenue |
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| 17,530 |
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| 15,577 |
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| 12,395 |
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Research and development |
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| 9,811 |
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| 9,043 |
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| 8,714 |
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Sales and marketing |
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| 13,857 |
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| 13,940 |
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| 13,214 |
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General and administrative |
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| 4,569 |
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| 4,222 |
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| 4,063 |
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Goodwill impairment |
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| 6,193 |
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| 0 |
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| 0 |
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Total operating expenses |
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| 51,960 |
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| 42,782 |
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| 38,386 |
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Operating income |
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| 21,763 |
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| 27,161 |
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| 24,098 |
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Other income |
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| 504 |
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| 910 |
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| 915 |
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Income before income taxes |
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| 22,267 |
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| 28,071 |
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| 25,013 |
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Provision for income taxes |
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| 5,289 |
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| 4,921 |
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| 6,253 |
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Net income |
| $ | 16,978 |
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| $ | 23,150 |
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| $ | 18,760 |
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Earnings per share: |
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Basic |
| $ | 2.02 |
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| $ | 2.73 |
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| $ | 2.13 |
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Diluted |
| $ | 2.00 |
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| $ | 2.69 |
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| $ | 2.10 |
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Weighted average shares outstanding: |
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Basic |
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| 8,396 |
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| 8,490 |
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| 8,813 |
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Diluted |
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| 8,506 |
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| 8,593 |
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| 8,927 |
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Cash dividends declared per common share |
| $ | 0.80 |
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| $ | 0.64 |
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| $ | 0.52 |
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