Microsoft and Ibm Financial Performance
Running Head: MICROSOFT AND IBM FINANCIAL PERFORMANCE
Microsoft and IBM Financial Performance
Team E
Managerial Finance I FIN/475
University of Phoenix
Rene Niese
April 7, 2008
Microsoft and IBM Financial Performance
Introduction
Team E has been charge with the task of preparing an analysis to evaluate Microsoft and IBM’s financial performance. This will be done by using trends, financial ratio analysis, and the firms’ most recent statements of cash flow. Team E will evaluate each firm’s financial performance for the last two years by (1) performing financial ratio analysis, (2) performing trend analysis, and (3) compare and contrast the findings. Team E’s analysis will include: Current Ratio – is an indication of a company 's ability to meet the company’s short-term debt obligations. Quick Ratio – measures a company 's liquidity and ability to meet the company’s short-term obligations with its most liquid assets; the higher the numbers, the better the position of the company. Debt-To-Equity Ratio – measures a company 's financial leverage and indicates what proportion of equity and debt the company is using to finance its assets. Net Profit Margin - indicates how much profit a company makes for every $1 it generates in revenue. Net profit margin – measures profitability by comparing net profit after taxes to revenue. Return On Equity – measures a corporation 's rate of return and reveals how much profit a company generates with the money shareholders have invested. Total Asset Turnover – measures how well a company uses assets to produce revenue. Return On Assets – indicates how profitable a company is related to its total assets and tells an investor how much profit a company generated for each dollar of
Microsoft and IBM Financial Performance
Team E
Managerial Finance I FIN/475
University of Phoenix
Rene Niese
April 7, 2008
Microsoft and IBM Financial Performance
Introduction
Team E has been charge with the task of preparing an analysis to evaluate Microsoft and IBM’s financial performance. This will be done by using trends, financial ratio analysis, and the firms’ most recent statements of cash flow. Team E will evaluate each firm’s financial performance for the last two years by (1) performing financial ratio analysis, (2) performing trend analysis, and (3) compare and contrast the findings. Team E’s analysis will include: Current Ratio – is an indication of a company 's ability to meet the company’s short-term debt obligations. Quick Ratio – measures a company 's liquidity and ability to meet the company’s short-term obligations with its most liquid assets; the higher the numbers, the better the position of the company. Debt-To-Equity Ratio – measures a company 's financial leverage and indicates what proportion of equity and debt the company is using to finance its assets. Net Profit Margin - indicates how much profit a company makes for every $1 it generates in revenue. Net profit margin – measures profitability by comparing net profit after taxes to revenue. Return On Equity – measures a corporation 's rate of return and reveals how much profit a company generates with the money shareholders have invested. Total Asset Turnover – measures how well a company uses assets to produce revenue. Return On Assets – indicates how profitable a company is related to its total assets and tells an investor how much profit a company generated for each dollar of
References: Block, S, and Hirt, G. (2005). Foundations of management. New York: McGraw Hill. http://www.uschamber.com/sb/business/P06/P06_7195.asp Chamber of Commerce. (2008). Total asset turnover. Retrieved April 6, 2008, from, The US Chamber of Commerce Web site: http://www.uschamber.com/sb/business/P06/P06_7195.asp IBM Showcases Strategy. (2007). Software and services at industry 's largest customer conference dedicated to advancing the $160 billion SOA Market. Retrieved on April 7, 2008, from, http://www-03.ibm.com/press/us/en/pressrelease/23820.wss Investopedia dictionary. (2007). Retrieved April 7, 2008, from, the World Wide Web on at www.investopedia.com InvestorWords. (2007). Current ratio. Retrieved April 6, 2008, from, http://www.investorwords.com/1258/current_ratio.html Microsoft. (2007). Microsoft makes strategic changes in technology and business practices to expand interoperability. Retrieved on April 7, 2008, from http://www.microsoft.com/presspass/press/2008/feb08/02-21ExpandInteroperabilityPR.mspx