Financial InformationIn this worksheet, you will recreate both the company's balance sheet and income statement for the past 3 yearsDon't forget to note your references for your data in the last TABMicrosoftMicrosoftIncome StatementBalance SheetFor the Years ended 2018 through 2020For the Years ended 2018 through 2020(Amounts in millions)(Amounts in millions)Fiscal Year:202020192018Fiscal Year:202020192018Total Revenue143,015125,843110,360 Cash, Cash Equivalents and Short Term Investments136,527133,819133,768Cost of Revenue46,07842,91038,353 Inventories1,8952,0632,662Gross Profit96,93782,93372,007 Trade and Other Receivables, Current32,01129,52426,481 Selling, General and Administrative Expenses24,70923,09822,223 Other Current Assets11,48210,1466,751 Research and Development Expenses19,26916,87614,726 Total Current Assets181,915175,552169,662Operating Income/Expenses43,97839,97436,949 Deferred Costs/Assets, CurrentTotal Operating Profit/Loss52,95942,95935,058 Total Non-Current Assets119,396111,00489,186Non-Operating Income/Expenses, Total777291,416 Net Property, Plant and Equipment52,90443,85636,146Pretax Income53,03643,68836,474 Net Intangible Assets50,38949,77643,736Provision for Income Tax8,7554,44819,903 Total Long Term Investments2,9652,6491,862Net Income from Continuing Operations44,28139,24016,571 Other Non-Current Assets13,13814,7237,442Total Assets301,311286,556258,848 Financial Liabilities, Current3,7495,5163,998 Provisions, Current7,8746,8306,103 Deferred Liabilities, Current36,00032,67628,905 Other Current Liabilities10,0279,3518,744 Total Current Liabilities72,31069,42058,488 Long Term Debt59,57866,66272,242 Capital Lease Obligations, Non-Current7,6716,1885,568 Tax Liabilities, Non-Current204233541 Deferred Income/Customer Advances/Billings in Excess of Cost, Non-Current3,1804,5303,815 Payables and Accrued Expenses, Non-Current29,43229,61230,265 Other Non-Current Liabilities10,6327,5815,211 Total Non-Current Liabilities110,697114,806117,642Total Liabilities183,007184,226176,130 Equity Attributable to Parent Stockholders118,304102,33082,718 Paid in Capital80,55278,52071,223 Retained Earnings/Accumulated Deficit34,56624,15013,682 Reserves/Accumulated Comprehensive Income/Losses3,186(340)(2,187)Total Equity118,304102,33082,718Total Equity and Liabiltiies301,311286,556258,848 3-Horizontal Analysis ISMicrosoftIncome StatementFor the Years ended 2018 through 2020(Amounts in millions)2019201820202019$ Change% Change20192018$ Change% Change2082018$ Change% ChangeTotal Revenue143,015125,84317,17213.6%125,843110,36015,48314.0%110,360110,360- 00.0%Cost of Revenue46,07842,9103,1687.4%42,91038,3534,55711.9%38,35338,353- 00.0%Gross Profit96,93782,93314,00416.9%82,93372,00710,92615.2%72,00772,007- 00.0% Selling, General and Administrative Expenses24, ...

1. Financial InformationIn this worksheet, you will recreate both
the company's balance sheet and income statement for the past 3
yearsDon't forget to note your references for your data in the
last TABMicrosoftMicrosoftIncome StatementBalance SheetFor
the Years ended 2018 through 2020For the Years ended 2018
through 2020(Amounts in millions)(Amounts in millions)Fiscal
Year:202020192018Fiscal Year:202020192018Total
Revenue143,015125,843110,360 Cash, Cash Equivalents
and Short Term Investments136,527133,819133,768Cost of
Revenue46,07842,91038,353
Inventories1,8952,0632,662Gross Profit96,93782,93372,007
Trade and Other Receivables, Current32,01129,52426,481
Selling, General and Administrative
Expenses24,70923,09822,223 Other Current
Assets11,48210,1466,751 Research and Development
Expenses19,26916,87614,726 Total Current
Assets181,915175,552169,662Operating
Income/Expenses43,97839,97436,949 Deferred
Costs/Assets, CurrentTotal Operating
Profit/Loss52,95942,95935,058 Total Non-Current
Assets119,396111,00489,186Non-Operating Income/Expenses,
Total777291,416 Net Property, Plant and
Equipment52,90443,85636,146Pretax
Income53,03643,68836,474 Net Intangible
Assets50,38949,77643,736Provision for Income
Tax8,7554,44819,903 Total Long Term
Investments2,9652,6491,862Net Income from Continuing
Operations44,28139,24016,571 Other Non-Current
Assets13,13814,7237,442Total Assets301,311286,556258,848
Financial Liabilities, Current3,7495,5163,998 Provisions,
Current7,8746,8306,103 Deferred Liabilities,
Current36,00032,67628,905 Other Current
Liabilities10,0279,3518,744 Total Current
Liabilities72,31069,42058,488 Long Term

2. Debt59,57866,66272,242 Capital Lease Obligations,
Non-Current7,6716,1885,568 Tax Liabilities, Non-
Current204233541 Deferred Income/Customer
Advances/Billings in Excess of Cost, Non-
Current3,1804,5303,815 Payables and Accrued Expenses,
Non-Current29,43229,61230,265 Other Non-Current
Liabilities10,6327,5815,211 Total Non-Current
Liabilities110,697114,806117,642Total
Liabilities183,007184,226176,130 Equity Attributable to
Parent Stockholders118,304102,33082,718 Paid in
Capital80,55278,52071,223 Retained
Earnings/Accumulated Deficit34,56624,15013,682
Reserves/Accumulated Comprehensive
Income/Losses3,186(340)(2,187)Total
Equity118,304102,33082,718Total Equity and
Liabiltiies301,311286,556258,848
3-Horizontal Analysis ISMicrosoftIncome StatementFor the
Years ended 2018 through 2020(Amounts in
millions)2019201820202019$ Change% Change20192018$
Change% Change2082018$ Change% ChangeTotal
Revenue143,015125,84317,17213.6%125,843110,36015,48314.0
%110,360110,360- 00.0%Cost of
Revenue46,07842,9103,1687.4%42,91038,3534,55711.9%38,35
338,353- 00.0%Gross
Profit96,93782,93314,00416.9%82,93372,00710,92615.2%72,00
772,007- 00.0% Selling, General and Administrative
Expenses24,70923,0981,6117.0%23,09822,2238753.9%22,2232
2,223- 00.0% Research and Development
Expenses19,26916,8762,39314.2%16,87614,7262,15014.6%14,7
2614,726- 00.0%Operating
Income/Expenses43,97839,9744,00410.0%39,97436,9493,0258.
2%36,94936,949- 00.0%Total Operating
Profit/Loss52,95942,95910,00023.3%42,95935,0587,90122.5%3
5,05835,058- 00.0%Non-Operating Income/Expenses,
Total77729(652)-89.4%7291,416(687)-48.5%1,4161,416-
00.0%Pretax

3. Income53,03643,6889,34821.4%43,68836,4747,21419.8%36,47
436,474- 00.0%Provision for Income
Tax8,7554,4484,30796.8%4,44819,903(15,455)-
77.7%19,90319,903- 00.0%Net Income from Continuing
Operations44,28139,2405,04112.8%39,24016,57122,669136.8%
16,57116,571- 00.0%
3- Horizontal Analysis BSMircosoftBalance SheetHorizontal
Analysis for the Years ended 2018through 2020(Amounts in
millions)20202019$ Change% Change20192018$ Change%
Change20182018$ Change% Change Cash, Cash
Equivalents and Short Term
Investments136,527133,8192,7082.0%133,819133,768510.0%13
3,768133,768- 00.0% Inventories1,8952,063(168)-
8.1%2,0632,662(599)-22.5%2,6622,662- 00.0% Trade and
Other Receivables,
Current32,01129,5242,4878.4%29,52426,4813,04311.5%26,481
26,481- 00.0% Other Current
Assets11,48210,1461,33613.2%10,1466,7513,39550.3%6,7516,7
51- 00.0% Total Current
Assets181,915175,5526,3633.6%175,552169,6625,8903.5%169,
662169,662- 00.0% Deferred Costs/Assets, Current Total
Non-Current
Assets119,396111,0048,3927.6%111,00489,18621,81824.5%89,
18689,186- 00.0% Net Property, Plant and
Equipment52,90443,8569,04820.6%43,85636,1467,71021.3%36,
14636,146- 00.0% Net Intangible
Assets50,38949,7766131.2%49,77643,7366,04013.8%43,73643,
736- 00.0% Total Long Term
Investments2,9652,64931611.9%2,6491,86278742.3%1,8621,86
2- 00.0% Other Non-Current Assets13,13814,723(1,585)-
10.8%14,7237,4427,28197.8%7,4427,442- 00.0%Total
Assets301,311286,55614,7555.1%286,556258,84827,70810.7%2
58,848258,848- 00.0% Financial Liabilities,
Current3,7495,516(1,767)-
32.0%5,5163,9981,51838.0%3,9983,998- 00.0%
Provisions,

4. Current7,8746,8301,04415.3%6,8306,10372711.9%6,1036,103-
00.0% Deferred Liabilities,
Current36,00032,6763,32410.2%32,67628,9053,77113.0%28,90
528,905- 00.0% Other Current
Liabilities10,0279,3516767.2%9,3518,7446076.9%8,7448,744-
00.0% Total Current
Liabilities72,31069,4202,8904.2%69,42058,48810,93218.7%58,
48858,488- 00.0% Long Term
Debt59,57866,662(7,084)-10.6%66,66272,242(5,580)-
7.7%72,24272,242- 00.0% Capital Lease Obligations,
Non-
Current7,6716,1881,48324.0%6,1885,56862011.1%5,5685,568-
00.0% Tax Liabilities, Non-Current204233(29)-
12.4%233541(308)-56.9%541541- 00.0% Deferred
Income/Customer Advances/Billings in Excess of Cost, Non-
Current3,1804,530(1,350)-
29.8%4,5303,81571518.7%3,8153,815- 00.0% Payables and
Accrued Expenses, Non-Current29,43229,612(180)-
0.6%29,61230,265(653)-2.2%30,26530,265- 00.0% Other
Non-Current
Liabilities10,6327,5813,05140.2%7,5815,2112,37045.5%5,2115
,211- 00.0% Total Non-Current
Liabilities110,697114,806(4,109)-3.6%114,806117,642(2,836)-
2.4%117,642117,642- 00.0%Total
Liabilities183,007184,226(1,219)-
0.7%184,226176,1308,0964.6%176,130176,130- 00.0%
Equity Attributable to Parent
Stockholders118,304102,33015,97415.6%102,33082,71819,612
23.7%82,71882,718- 00.0% Paid in
Capital80,55278,5202,0322.6%78,52071,2237,29710.2%71,223
71,223- 00.0% Retained Earnings/Accumulated
Deficit34,56624,15010,41643.1%24,15013,68210,46876.5%13,6
8213,682- 00.0% Reserves/Accumulated Comprehensive
Income/Losses3,186(340)3,526-1037.1%(340)(2,187)1,847-
84.5%(2,187)(2,187)- 00.0%Total
Equity118,304102,33015,97415.6%102,33082,71819,61223.7%8

5. 2,71882,718- 00.0%Total Equity and
Liabiltiies301,311286,55614,7555.1%286,556258,84827,70810.
7%258,848258,848- 00.0%
3 Vertical Analysis ISMicorsoftIncome StatementVertical
Analysis for the Years ended 2018 through 2020(Amounts in
millions)2020%2019%2018%Total
Revenue143,015100.0%110,360100.0%110,360100.0%Cost of
Revenue46,07832.2%38,35334.8%38,35334.8%Gross
Profit96,93767.8%72,00765.2%72,00765.2% Selling, General
and Administrative
Expenses24,70917.3%22,22320.1%22,22320.1% Research and
Development
Expenses19,26913.5%14,72613.3%14,72613.3%Operating
Income/Expenses43,97830.8%36,94933.5%36,94933.5%Total
Operating
Profit/Loss52,95937.0%35,05831.8%35,05831.8%Non-
Operating Income/Expenses,
Total770.1%1,4161.3%1,4161.3%Pretax
Income53,03637.1%36,47433.1%36,47433.1%Provision for
Income Tax8,7556.1%19,90318.0%19,90318.0%Net Income
from Continuing
Operations44,28131.0%16,57115.0%16,57115.0%
3 Vertical Analysis BSMicrosoftBalance SheetVertical Analysis
for the Years ended 2018 through 2020(Amounts in
millions)2020%2019%2018% Cash, Cash Equivalents and
Short Term
Investments136,52745.3%133,81946.7%133,76851.7%
Inventories1,8950.6%2,0630.7%2,6621.0% Trade and
Other Receivables,
Current32,01110.6%29,52410.3%26,48110.2% Other
Current Assets11,4823.8%10,1463.5%6,7512.6% Total
Current Assets181,91560.4%175,55261.3%169,66265.5%
Deferred Costs/Assets, Current Total Non-Current
Assets119,39639.6%111,00438.7%89,18634.5% Net
Property, Plant and
Equipment52,90417.6%43,85615.3%36,14614.0% Net

6. Intangible Assets50,38916.7%49,77617.4%43,73616.9%
Total Long Term Investments2,9651.0%2,6490.9%1,8620.7%
Other Non-Current
Assets13,1384.4%14,7235.1%7,4422.9%Total
Assets301,311100.0%286,556100.0%258,848100.0%
Financial Liabilities, Current3,7491.2%5,5161.9%3,9981.5%
Provisions, Current7,8742.6%6,8302.4%6,1032.4%
Deferred Liabilities,
Current36,00011.9%32,67611.4%28,90511.2% Other
Current Liabilities10,0273.3%9,3513.3%8,7443.4% Total
Current Liabilities72,31024.0%69,42024.2%58,48822.6%
Long Term Debt59,57819.8%66,66223.3%72,24227.9%
Capital Lease Obligations, Non-
Current7,6712.5%6,1882.2%5,5682.2% Tax Liabilities,
Non-Current2040.1%2330.1%5410.2% Deferred
Income/Customer Advances/Billings in Excess of Cost, Non-
Current3,1801.1%4,5301.6%3,8151.5% Payables and
Accrued Expenses, Non-
Current29,4329.8%29,61210.3%30,26511.7% Other Non-
Current Liabilities10,6323.5%7,5812.6%5,2112.0% Total
Non-Current
Liabilities110,69736.7%114,80640.1%117,64245.4%Total
Liabilities183,00760.7%184,22664.3%176,13068.0% Equity
Attributable to Parent
Stockholders118,30439.3%102,33035.7%82,71832.0% Paid
in Capital80,55226.7%78,52027.4%71,22327.5% Retained
Earnings/Accumulated
Deficit34,56611.5%24,1508.4%13,6825.3%
Reserves/Accumulated Comprehensive
Income/Losses3,1861.1%(340)-0.1%(2,187)-0.8%Total
Equity118,30439.3%102,33035.7%82,71832.0%Total Equity
and Liabiltiies301,311100.0%286,556100.0%258,848100.0%
4-Liquidity RatioLIQUIDITY RATIOSFiscal
Year:YYYYYYYYYYYYNAME OF RATIO AND
FORMULANAME OF RATIO AND FORMULANAME OF
RATIO AND FORMULA

7. 4-Coverage RatioLONG-TERM DEBT PAYING (COVERAGE
RATIOS)Fiscal Year:YYYYYYYYYYYYNAME OF RATIO
AND FORMULANAME OF RATIO AND FORMULANAME OF
RATIO AND FORMULA
5-Activity RatioACTIVITY RATIOFiscal
Year:YYYYYYYYYYYYNAME OF RATIO AND
FORMULANAME OF RATIO AND FORMULANAME OF
RATIO AND FORMULA
5-Profitability RatioPROFITABILITY RATIOSFiscal
Year:YYYYYYYYYYYYNAME OF RATIO AND
FORMULANAME OF RATIO AND FORMULANAME OF
RATIO AND FORMULA
REFERENCESReferences: TABFINANCIAL
INFORMATIONU.S. Securities and Exchange Commission
(2019). 2019 Annual SEC Form 10-K Report, Costco Wholesale
Corporation. Retrieved from
https://www.sec.gov/Archives/edgar/data/909832/000090983219
000019/cost10k9119.htmThis is an example of your reference.
You will use the actual reference from your company. You will
create one for each different SEC Form 10K report you will cite
1
COURSE PROJECT OVERVIEW
The course project consists of a series of interconnected weekly
assignments that culminates in a final
project submission (Unit 7) and a presentation (Unit 8).
Students will use the business case scenario
below to complete the project and follow the deliverable
schedule included at the end of this document.
BUSINESS CASE

8. A healthy lifestyle advocacy group is aiming to build a bike
sharing system within a medium size
metropolitan area. The group has signed a contract with a
company to provide the bike sharing
technology and hardware (bike stations, bikes, network
equipment, a server, and bike sharing software
that automates the process of checking out and returning
bicycles, and billing customers).
DOCKING STATIONS & BIKES
Image source
The docking station provides a limited number of bike parking
spots, and is characterized by its location,
bike capacity, and by real time number of bikes parked.
Docking stations have computers running on
them, credit card reader, and a networking module which allows
it to be connected to the Internet. The
fleet of bikes has also been purchased.
FUNCTIONING OF THE SYSTEM
There are two ways a user can get access to the system:
1) Using her annual subscription ($70)
2) Buying day pass ($5)
Every ride under 30 minutes is free. User is charged $1 dollar
for a ride between 30 and 1 hour, 3 dollars
for rides between 1 hour and 2 hours and a flat rate of 7 doll ars
for any ride over 2 hours. The users who
haven’t returned a bike within 10 hours are billed with a $50
fine.

9. REGISTRATION PROCESS
A user can register online or purchase a day pass at the station.
https://www.8d.com/products-solutions/8d-bike-share-solution/
2
SCHEDULE
Unit Title Introduction Description Points
Unit 1 The summary of
the business
processes with the
rationale for the
new system
development
The advocacy group as hired an IS
developer company to develop an
information system to support
operations of the bike sharing system.
See the business case for detailed
description. First the developer company
analyzed operational business processes
of the bike sharing systems (bike renting,
user management and billing) to produce
a summary of those processes, and
describe how the information system will

10. be able to automate them.
Submit a two-page summary with the
description of each business process, which will
include:
1) brief description of what or who (hardware
or user) will initiate it;
2) what the process should do.
3) Explain what would be the role of the
information system to support this process.
40
Unit 2 The description of
the IS architecture,
the list of the
software and
database
components, and
hardware
architecture
The IS designed for the case should
connect docking stations, manage user
registrations and billing. We learned
about different architecture models (e.g.
centralized, distributed, and cloud).
In a Word document:

11. 1. Propose the IS architecture for the IS for
the bike sharing system. Explain the
rationale behind the choice (between
half of a page and a page);
2. list all the software, and database, and
hardware components;
3. draw a architecture of the system
showing the components using Word
shapes, use arrows to show business
process and major data flow between
40
3
them.
Unit 3 Security risks
summary
Any IS functions under security risks.
These risks are especially critical when a
system is distributed and connected to
public networks.
Provide a one page security risks summary for
proposed IS which should include:
1. main security risks and the potential
consequences;

12. 2. methods or design strategies to
minimize each of those risks.
Recommend a brief (one paragraph) structure
of information security management that would
include personnel roles with their core duties to
manage information security.
40
Unit 4 Designing and
implementing the
software
component
Designing and coding the entire software
system for the given case is a complex
task. For this project, you will be asked to
design and implement a small
component of the information system
functionality.
Submit a Word document that would include:
1) Flow chart of the billing schema after
completion of the ride, which will
include including the subscription status
check, and the price policy provided in
the case description.
2) Assuming that subscription_status == 1
is an annual subscriber and
subscription_status == 2 is a daily
subscriber for the day stored in the

13. variable day_subscribed and the current
day stored in a variable now,
pickup_time and drop_off_time are the
times in minutes, write a Python code
to describe subscription check and the
40
4
price calculation for a single ride.
Unit 5 Business data
architecture / data
models
Any IS system operates with data. Data
can have different types
Design data structures (variables, lists, objects)
that will describe the registration and billing
processes.
Submit a Word document with the data
structures IS will need to have in order to
support those processes. For example, one of
the structures should describe a list of
registered users with their statuses and other
parameters that you will find important.
40

14. Unit 6 Design of the
relational database
structure
Data in IS can be stored in the database.
Relational databases are the most
commonly used type of databases.
In a Word document:
1) create a table(s) to describe current and
historical rides;
2) write SQL statements that would allow:
a. to compute the average ride
duration for a given user;
b. number of bikes check out at
the given bike station;
c. retrieve the list of all currently
active users.
40
Unit 7 Development and
implementation
plan
In this unit, you will finalize your course
project by creating a development and
implementation plan.
Final submission:

15. Create a development and implementation plan
by gathering key information from each of the
project components you developed this term
and summarizing it in the format outlined
60
5
below. Note that you should incorporate faculty
feedback when developing your plan.
Submit a 1-2 page plan describing your system
and the development and implementation steps
that the company will need to take to in order
to successfully complete the project. Your
summary should include the following
elements:
—Description of the
system and the process(es) it supports
—Summary of the
system's structure and components
(software and hardware)
—Summary of system security
requirements and/or features
—Annotated list of each
major task or step required for the
implementation of the system

16. Unit 8 Course project
presentation
This week, you will share your Course
Project with the class by presenting it
within the discussion forum.
Project presentation
1. Record a video of yourself briefly
explaining the steps you have taken in
this project; and why did you chose the
solutions you did; and what are the
steps that will needed to be taken to
complete the IS development. The
video should be between 7-10 minutes
long.
50
6
2. Upload your video on YouTube with
enabled closed captions (CC)).
3. Write one to three sentences for each
component of the project to explain the
key points presented in your video.
Post the link to the video you have created
along with the written summary.

17. Total 350
Running Head: MICROSOFT Annual Report Project 3
1
MICROSOFT
9
Annual Report Project 3
Lakisha Trammel
Dr. Ron Stunda
GUC
ACC-616-0500
January 27, 2021
Introduction
The main purpose of this report is to analyze horizontally and
vertically, both income statement and balance sheet within the
last three years of Microsoft. The years we are looking for are
from 2018 - 2020, with June 30th, year-end date.

18. Vertical and Horizontal Analysis of Income Statement
Microsoft's vertical income statement demonstrations that the
company has increased its bottom-line profitability, and has
done so by improving their controlling expenses. The cost of
revenue decreased from 34.8% in 2018 to 34.1% in 2019, and
then decreased to 32.2% in the financial year ended on June 30,
2020. That caused the gross profit to increase from 65.2% to
67.8% over the same time period.
The company controlled its expenses by covering them in a
regular manner. As a result, the ratio for SG&A expenses
decreased from 20.1 % to 18.4 % in 2011, to 17.3 % in 2012,
and then further decreased to 16.7 % in 2016 and then further to
16.3 % in 2017.
However, the company has gradually increased its R&D
expenses as it is necessary for the development and growth of
the company. In turn, operating profits more than doubled from
31.8% in 2018 to 37% in 2020. Non-operating costs also
declined by a small amount in the second year compared to the
first. The overall amount of taxable income increased from
33.1% in 2018 to 34.7% in 2019, and then to 37.1% in 2020.
Although income tax expenditure as a proportion of federal
revenue decreased from 18% in 2018 to 6.1% in 2020, it
continues to decrease in figures. With the rise of every fiscal
year, the net income rose from 15%, 2018 to more than 31% by
the end of the calendar year 2020.
Microsoft's revenue increased % for 2019 as opposed to 2018,
and then increased 13.6 % in 2020. In 2018, the lower sales cost
decreased faster than the beginning and advancing of the 2018-
2020 period, but in 2019 and 2020, the income revenue jumped
by 11.9% in 2019 and 7.4% in 2020, respectively.
Aside from the double-digit increase in revenues and gross
profit for both years, the growth in these two segments was also
higher than the growth in revenue. As a result of improvements
in advertisement, revenues, and general and administrative cost
costs, a larger amount of revenue was achieved. However, non-
operating income has been declining since last year, and this

19. year's decrease does not appear to be related to interest income.
Income taxes decreased by 78 % in 2018, but jumped back up to
an unexpected level in 2020. As a result, net income rose by
136.8% in 201, a further 12.8% in 2020.
Balance Sheet Vertical and Horizontal Analysis
The percentage by which cash and cash equivalents fell in
the last three years from more than half to less than half of total
deposits. Inventory levels declined as compared to years past
while receivables and other current assets increased a tiny
amount. Since 2018, total current assets fell by 2%, from $29
billion to $28.4 billion. The decrease in your current assets will
help you decrease your current liabilities. Yet liability remains
roughly the same over the past three years.
Total liabilities increased, but assets increased. Even more
impressive is the increase in net worth since depreciation, and
also the increase in property, plant and equipment, because of
depreciation. The result of all these factors was that both
tangible and intangible assets increased. It rationalizes the
decline in assets, mostly cash, as the company has misused
some of its internal capital to fund a few acquisitions. The long
term investments have been increasing over time, albeit at a
slow pace.
Current liabilities have increased substantially, but not enough
to offset the large increase in provisions and other current
liabilities.
Even though the inventory of current and non-current assets are
low, the stocks of non-current assets decreased gradually over
the last three years and reached 60.7 % of the total assets.
The amount of long term debt, which is declining, was on a rise
up to a number of 28.0%, then it went down to 22.1%. The
amount of both payable and accrued liabilities has declined
slightly over the last three years, but remains small compared to
the total assets of the company. As a result, total liabilities
decreased from 45.4% down to 37.7%
The stock price increased due to the issuance of new shares and
retained earnings. In short, in 2018, the retained earnings

20. amount decreased to 5.3% while in 2020, the retained earnings
percentage continues to rise up to 11.5%.
Overall total current assets increased as the level of
current assets increased.
The horizontal review in the balance sheet reveals that
cash, inventory, and investments rose marginally in 2020 as
compared to 2019.
The total value of non-current assets also increased with the rise
in the value of the company's plant and equipment. Over time
the overall investments increased but the percentage of total
investments decreased. Some assets are expected to decrease by
more than 11% in 2020 compared to the previous year while
others are expected to rise by just about 98% in 2019.
The liabilities are expected to grow by 18.7% in the next three
years and around 4.2% in the next two years. The main part of
the rise came from the summer expense of development due to
provisions and borrowing and from other current liabilities.
Long-term liabilities in the company's balance sheet dropped
considerably as the company paid down long-term debt. Other
non-current liabilities, however, are actually increasing in the
past few years.
Although total equity increased in the first half of this year, half
of the increase came from the issuance of new equity.
References
Microsoft, (2020). Annual Report 2020- Satya Nadella, Chief

21. Executive Officer. Retrieved from https://microsoft.gcs-
web.com/static-files/4e7064ed-bbf7-4140-a8cb-79aba77421b9
Microsoft, (2019). Annual Report 2019- Satya Nadella, Chief
Executive Officer. Retrieved from
https://www.microsoft.com/investor/reports/ar19/index. html
Nadella, S., & London, S. (2018). Microsoft’s Next Act. The
McKinsey Quarterly.
Appendix

22. Total Current Assets18191517555216966260.4%61.3%65.5%
Deferred Costs/Assets, Current
Total Non-Current
Assets1193961110048918639.6%38.7%34.5%
Net Property, Plant and
Equipment52904438563614617.6%15.3%14.0%
Net Intangible Assets50389497764373616.7%17.4%16.9%
Total Long Term
Investments2965264918621.0%0.9%0.7%
Other Non-Current Assets131381472374424.4%5.1%2.9%
Total Assets301311286556258848100.0%100.0%100.0%
Financial Liabilities, Current3749551639981.2%1.9%1.5%
Provisions, Current7874683061032.6%2.4%2.4%
Deferred Liabilities,
Current36000326762890511.9%11.4%11.2%
Other Current Liabilities10027935187443.3%3.3%3.4%
Total Current Liabilities72310694205848824.0%24.2%22.6%
Long Term Debt59578666627224219.8%23.3%27.9%
Capital Lease Obligations, Non-
Current7671618855682.5%2.2%2.2%
Tax Liabilities, Non-Current2042335410.1%0.1%0.2%
Deferred Income/Customer
Advances/Billings in Excess of Cost, Non-
Current3180453038151.1%1.6%1.5%
Payables and Accrued Expenses, Non-
Current2943229612302659.8%10.3%11.7%
Other Non-Current
Liabilities10632758152113.5%2.6%2.0%
Total Non-Current
Liabilities11069711480611764236.7%40.1%45.4%
Total Liabilities18300718422617613060.7%64.3%68.0%
Equity Attributable to Parent
Stockholders1183041023308271839.3%35.7%32.0%

23. Paid in Capital80552785207122326.7%27.4%27.5%
Retained Earnings/Accumulated
Deficit34566241501368211.5%8.4%5.3%
Reserves/Accumulated Comprehensive
Income/Losses3186-340-21871.1%-0.1%-0.8%
Total Equity1183041023308271839.3%35.7%32.0%
Total Equity and Liabiltiies
301311286556258848100.0%100.0%100.0%
MSFT_BalanceSheet_Annua Horizontal
202020192018202020192018
Cash, Cash Equivalents and Short Term
Investments136527133819133768102.0%100.0%100.0%
Inventories18952063266291.9%77.5%100.0%
Trade and Other Receivables,
Current320112952426481108.4%111.5%100.0%
Other Current
Assets11482101466751113.2%150.3%100.0%
Total Current
Assets181915175552169662103.6%103.5%100.0%
Deferred Costs/Assets, Current
Net Property, Plant and
Equipment529044385636146120.6%121.3%100.0%
Net Intangible
Assets503894977643736101.2%113.8%100.0%
Total Long Term
Investments296526491862111.9%142.3%100.0%
Other Non-Current
Assets1313814723744289.2%197.8%100.0%
Total Non-Current
Assets11939611100489186107.6%124.5%100.0%
Total Assets301311286556258848105.1%110.7%100.0%
Financial Liabilities,
Current37495516399868.0%138.0%100.0%
Provisions, Current787468306103115.3%111.9%100.0%
Deferred Liabilities,
Current360003267628905110.2%113.0%100.0%

24. Other Current
Liabilities1002793518744107.2%106.9%100.0%
Total Current
Liabilities723106942058488104.2%118.7%100.0%
Long Term
Debt59578666627224289.4%92.3%100.0%
Capital Lease Obligations, Non-
Current767161885568124.0%111.1%100.0%
Tax Liabilities, Non-
Current20423354187.6%43.1%100.0%
Deferred Income/Customer Advances/Billings in Excess
of Cost, Non-Current31804530381570.2%118.7%100.0%
Payables and Accrued Expenses, Non-
Current29432296123026599.4%97.8%100.0%
Other Non-Current
Liabilities1063275815211140.2%145.5%100.0%
Total Non-Current
Liabilities11069711480611764296.4%97.6%100.0%
Total Liabilities18300718422617613099.3%104.6%100.0%
Equity Attributable to Parent
Stockholders11830410233082718115.6%123.7%100.0%
Paid in Capital805527852071223102.6%110.2%100.0%
Retained Earnings/Accumulated
Deficit345662415013682143.1%176.5%100.0%
Reserves/Accumulated Comprehensive
Income/Losses3186-340-2187-937.1%15.5%100.0%
Total Equity11830410233082718115.6%123.7%100.0%
Total Equity and Liabiltiies
301311286556258848105.1%110.7%100.0%
MSFT_Income Statement Verical
202020192018202020192018
Total Revenue143,015 125,843 110,360 100.0%100.0%100.0%
Cost of Revenue46,078 42,910 38,353 32.2%34.1%34.8%
Gross Profit96,937 82,933 72,007 67.8%65.9%65.2%
Selling, General and Administrative Expenses24,709 23,098
22,223 17.3%18.4%20.1%

25. Research and Development Expenses19,269 16,876 14,726
13.5%13.4%13.3%
Operating Income/Expenses43,978 39,974 36,949
30.8%31.8%33.5%
Total Operating Profit/Loss52,959 42,959 35,058
37.0%34.1%31.8%
Non-Operating Income/Expenses, Total77 729
1,416 0.1%0.6%1.3%
Pretax Income53,036 43,688 36,474 37.1%34.7%33.1%
Provision for Income Tax8,755 4,448 19,903
6.1%3.5%18.0%
Net Income from Continuing Operations44,281 39,240
16,571 31.0%31.2%15.0%
MSFT_IncomeStatement_Horizontal
202020192018202020192018
Total Revenue143,015 125,843 110,360
113.6%114.0%100.0%
Cost of Revenue46,078 42,910 38,353
107.4%111.9%100.0%
Gross Profit96,937 82,933 72,007
116.9%115.2%100.0%
Selling, General and Administrative Expenses24,709
23,098 22,223 107.0%103.9%100.0%
Research and Development Expenses19,269 16,876
14,726 114.2%114.6%100.0%
Operating Income/Expenses43,978 39,974 36,949
110.0%108.2%100.0%
Total Operating Profit/Loss52,959 42,959 35,058
123.3%122.5%100.0%
Non-Operating Income/Expenses, Total77 729
1,416 10.6%51.5%100.0%
Pretax Income53,036 43,688 36,474
121.4%119.8%100.0%
Provision for Income Tax8,755 4,448 19,903
196.8%22.3%100.0%
Net Income from Continuing Operations44,281 39,240

26. 16,571 112.8%236.8%100.0%
Financial InformationMicrosoftMicrosoftIncome
StatementBalance SheetFor the Years ended 2018 through
2020For the Years ended 2018 through 2020(Amounts in
millions)(Amounts in millions)Fiscal Year:202020192018Fiscal
Year:202020192018Total Revenue143,015125,843110,360
Cash, Cash Equivalents and Short Term
Investments136,527133,819133,768Cost of
Revenue46,07842,91038,353
Inventories1,8952,0632,662Gross Profit96,93782,93372,007
Trade and Other Receivables, Current32,01129,52426,481
Selling, General and Administrative
Expenses24,70923,09822,223 Other Current
Assets11,48210,1466,751 Research and Development
Expenses19,26916,87614,726 Total Current
Assets181,915175,552169,662Operating
Income/Expenses43,97839,97436,949 Deferred
Costs/Assets, CurrentTotal Operating
Profit/Loss52,95942,95935,058 Total Non-Current
Assets119,396111,00489,186Non-Operating Income/Expenses,
Total777291,416 Net Property, Plant and
Equipment52,90443,85636,146Pretax
Income53,03643,68836,474 Net Intangible
Assets50,38949,77643,736Provision for Income
Tax8,7554,44819,903 Total Long Term
Investments2,9652,6491,862Net Income from Continuing
Operations44,28139,24016,571 Other Non-Current
Assets13,13814,7237,442Total Assets301,311286,556258,848
Financial Liabilities, Current3,7495,5163,998 Provisions,
Current7,8746,8306,103 Deferred Liabilities,
Current36,00032,67628,905 Other Current
Liabilities10,0279,3518,744 Total Current
Liabilities72,31069,42058,488 Long Term
Debt59,57866,66272,242 Capital Lease Obligations,
Non-Current7,6716,1885,568 Tax Liabilities, Non-

27. Current204233541 Deferred Income/Customer
Advances/Billings in Excess of Cost, Non-
Current3,1804,5303,815 Payables and Accrued Expenses,
Non-Current29,43229,61230,265 Other Non-Current
Liabilities10,6327,5815,211 Total Non-Current
Liabilities110,697114,806117,642Total
Liabilities183,007184,226176,130 Equity Attributa ble to
Parent Stockholders118,304102,33082,718 Paid in
Capital80,55278,52071,223 Retained
Earnings/Accumulated Deficit34,56624,15013,682
Reserves/Accumulated Comprehensive
Income/Losses3,186(340)(2,187)Total
Equity118,304102,33082,718Total Equity and
Liabiltiies301,311286,556258,848
3-Horizontal Analysis ISMicrosoftIncome StatementFor the
Years ended 2018 through 2020(Amounts in
millions)2019201820202019$ Change% Change20192018$
Change% Change2082018$ Change% ChangeTotal
Revenue143,015125,84317,17213.6%125,843110,36015,48314.0
%110,360110,360- 00.0%Cost of
Revenue46,07842,9103,1687.4%42,91038,3534,55711.9%38,35
338,353- 00.0%Gross
Profit96,93782,93314,00416.9%82,93372,00710,92615.2%72,00
772,007- 00.0% Selling, General and Administrative
Expenses24,70923,0981,6117.0%23,09822,2238753.9%22,2232
2,223- 00.0% Research and Development
Expenses19,26916,8762,39314.2%16,87614,7262,15014.6%14,7
2614,726- 00.0%Operating
Income/Expenses43,97839,9744,00410.0%39,97436,9493,0258.
2%36,94936,949- 00.0%Total Operating
Profit/Loss52,95942,95910,00023.3%42,95935,0587,90122.5%3
5,05835,058- 00.0%Non-Operating Income/Expenses,
Total77729(652)-89.4%7291,416(687)-48.5%1,4161,416-
00.0%Pretax
Income53,03643,6889,34821.4%43,68836,4747,21419.8%36,47
436,474- 00.0%Provision for Income

28. Tax8,7554,4484,30796.8%4,44819,903(15,455)-
77.7%19,90319,903- 00.0%Net Income from Continuing
Operations44,28139,2405,04112.8%39,24016,57122,669136.8%
16,57116,571- 00.0%
3- Horizontal Analysis BSMircosoftBalance SheetHorizontal
Analysis for the Years ended 2018through 2020(Amounts in
millions)20202019$ Change% Change20192018$ Change%
Change20182018$ Change% Change Cash, Cash
Equivalents and Short Term
Investments136,527133,8192,7082.0%133,819133,768510.0%13
3,768133,768- 00.0% Inventories1,8952,063(168)-
8.1%2,0632,662(599)-22.5%2,6622,662- 00.0% Trade and
Other Receivables,
Current32,01129,5242,4878.4%29,52426,4813,04311.5%26,481
26,481- 00.0% Other Current
Assets11,48210,1461,33613.2%10,1466,7513,39550.3%6,7516,7
51- 00.0% Total Current
Assets181,915175,5526,3633.6%175,552169,6625,8903.5%169,
662169,662- 00.0% Deferred Costs/Assets, Current Total
Non-Current
Assets119,396111,0048,3927.6%111,00489,18621,81824.5%89,
18689,186- 00.0% Net Property, Plant and
Equipment52,90443,8569,04820.6%43,85636,1467,71021.3%36,
14636,146- 00.0% Net Intangible
Assets50,38949,7766131.2%49,77643,7366,04013.8%43,73643,
736- 00.0% Total Long Term
Investments2,9652,64931611.9%2,6491,86278742.3%1,8621,86
2- 00.0% Other Non-Current Assets13,13814,723(1,585)-
10.8%14,7237,4427,28197.8%7,4427,442- 00.0%Total
Assets301,311286,55614,7555.1%286,556258,84827,70810.7%2
58,848258,848- 00.0% Financial Liabilities,
Current3,7495,516(1,767)-
32.0%5,5163,9981,51838.0%3,9983,998- 00.0%
Provisions,
Current7,8746,8301,04415.3%6,8306,10372711.9%6,1036,103-
00.0% Deferred Liabilities,

29. Current36,00032,6763,32410.2%32,67628,9053,77113.0%28,90
528,905- 00.0% Other Current
Liabilities10,0279,3516767.2%9,3518,7446076.9%8,7448,744-
00.0% Total Current
Liabilities72,31069,4202,8904.2%69,42058,48810,93218.7%58,
48858,488- 00.0% Long Term
Debt59,57866,662(7,084)-10.6%66,66272,242(5,580)-
7.7%72,24272,242- 00.0% Capital Lease Obligations,
Non-
Current7,6716,1881,48324.0%6,1885,56862011.1%5,5685,568-
00.0% Tax Liabilities, Non-Current204233(29)-
12.4%233541(308)-56.9%541541- 00.0% Deferred
Income/Customer Advances/Billings in Excess of Cost, Non-
Current3,1804,530(1,350)-
29.8%4,5303,81571518.7%3,8153,815- 00.0% Payables and
Accrued Expenses, Non-Current29,43229,612(180)-
0.6%29,61230,265(653)-2.2%30,26530,265- 00.0% Other
Non-Current
Liabilities10,6327,5813,05140.2%7,5815,2112,37045.5%5,2115
,211- 00.0% Total Non-Current
Liabilities110,697114,806(4,109)-3.6%114,806117,642(2,836)-
2.4%117,642117,642- 00.0%Total
Liabilities183,007184,226(1,219)-
0.7%184,226176,1308,0964.6%176,130176,130- 00.0%
Equity Attributable to Parent
Stockholders118,304102,33015,97415.6%102,33082,71819,612
23.7%82,71882,718- 00.0% Paid in
Capital80,55278,5202,0322.6%78,52071,2237,29710.2%71,223
71,223- 00.0% Retained Earnings/Accumulated
Deficit34,56624,15010,41643.1%24,15013,68210,46876.5%13,6
8213,682- 00.0% Reserves/Accumulated Comprehensive
Income/Losses3,186(340)3,526-1037.1%(340)(2,187)1,847-
84.5%(2,187)(2,187)- 00.0%Total
Equity118,304102,33015,97415.6%102,33082,71819,61223.7%8
2,71882,718- 00.0%Total Equity and
Liabiltiies301,311286,55614,7555.1%286,556258,84827,70810.

30. 7%258,848258,848- 00.0%
3 Vertical Analysis ISMicorsoftIncome StatementVertical
Analysis for the Years ended 2018 through 2020(Amounts in
millions)2020%2019%2018%Total
Revenue143,015100.0%110,360100.0%110,360100.0%Cost of
Revenue46,07832.2%38,35334.8%38,35334.8%Gross
Profit96,93767.8%72,00765.2%72,00765.2% Selling, General
and Administrative
Expenses24,70917.3%22,22320.1%22,22320.1% Research and
Development
Expenses19,26913.5%14,72613.3%14,72613.3%Operating
Income/Expenses43,97830.8%36,94933.5%36,94933.5%Total
Operating
Profit/Loss52,95937.0%35,05831.8%35,05831.8%Non-
Operating Income/Expenses,
Total770.1%1,4161.3%1,4161.3%Pretax
Income53,03637.1%36,47433.1%36,47433.1%Provision for
Income Tax8,7556.1%19,90318.0%19,90318.0%Net Income
from Continuing
Operations44,28131.0%16,57115.0%16,57115.0%
3 Vertical Analysis BSMicrosoft.Vertical Analysis for the Years
ended 2018 through 2020(Amounts in
millions)2020%2019%2018% Cash, Cash Equivalents and
Short Term
Investments136,52745.3%133,81946.7%133,76851.7%
Inventories1,8950.6%2,0630.7%2,6621.0% Trade and
Other Receivables,
Current32,01110.6%29,52410.3%26,48110.2% Other
Current Assets11,4823.8%10,1463.5%6,7512.6% Total
Current Assets181,91560.4%175,55261.3%169,66265.5%
Deferred Costs/Assets, Current Total Non-Current
Assets119,39639.6%111,00438.7%89,18634.5% Net
Property, Plant and
Equipment52,90417.6%43,85615.3%36,14614.0% Net
Intangible Assets50,38916.7%49,77617.4%43,73616.9%
Total Long Term Investments2,9651.0%2,6490.9%1,8620.7%

31. Other Non-Current
Assets13,1384.4%14,7235.1%7,4422.9%Total
Assets301,311100.0%286,556100.0%258,848100.0%
Financial Liabilities, Current3,7491.2%5,5161.9%3,9981.5%
Provisions, Current7,8742.6%6,8302.4% 6,1032.4%
Deferred Liabilities,
Current36,00011.9%32,67611.4%28,90511.2% Other
Current Liabilities10,0273.3%9,3513.3%8,7443.4% Total
Current Liabilities72,31024.0%69,42024.2%58,48822.6%
Long Term Debt59,57819.8%66,66223.3%72,24227.9%
Capital Lease Obligations, Non-
Current7,6712.5%6,1882.2%5,5682.2% Tax Liabilities,
Non-Current2040.1%2330.1%5410.2% Deferred
Income/Customer Advances/Billings in Excess of Cost, Non-
Current3,1801.1%4,5301.6%3,8151.5% Payables and
Accrued Expenses, Non-
Current29,4329.8%29,61210.3%30,26511.7% Other Non-
Current Liabilities10,6323.5%7,5812.6%5,2112.0% Total
Non-Current
Liabilities110,69736.7%114,80640.1%117,64245.4%Total
Liabilities183,00760.7%184,22664.3%176,13068.0% Equity
Attributable to Parent
Stockholders118,30439.3%102,33035.7%82,71832.0% Paid
in Capital80,55226.7%78,52027.4%71,22327.5% Retained
Earnings/Accumulated
Deficit34,56611.5%24,1508.4%13,6825.3%
Reserves/Accumulated Comprehensive
Income/Losses3,1861.1%(340)-0.1%(2,187)-0.8%Total
Equity118,30439.3%102,33035.7%82,71832.0%Total Equity
and Liabiltiies301,311100.0%286,556100.0%258,848100.0%
REFERENCESReferences: TABFINANCIAL
INFORMATIONU.S. Securities and Exchange Commission
(2019). 2019 Annual SEC Form 10-K Report, Costco Wholesale
Corporation. Retrieved from
https://www.sec.gov/Archives/edgar/data/909832/000090983219
000019/cost10k9119.htmThis is an example of your reference.

32. You will use the actual reference from your company. You will
create one for each different SEC Form 10K report you will cite
Running Head: MICROSOFT
MICROSOFT 2
MICROSOFT
Lakisha Trammel
GCU
1/12/2021
In the MD&A of the 2019 annual report, Microsoft highlighted
various factors such as increasing revenues, a potential rise in
market-share due to new product (Azure), stiff competition and
emergence of artificial intelligence (AI) as the main factors
influencing its future business viability. According to
Microsoft, the future will be influenced by AI and Microsoft is
confident that it will expand market share due to its new
product called Azure. The four key issues are business, market
for equity, the management and exhibits. These four issues have
been expanded significantly in the report and a summary is
included in this study.
The first issue is the exhibit that seeks to disclose the schedules
for other reports the periods ending as well as the date of
release. Among such include the income statement, balance

33. sheet, cash flow statement, shareholders’ equity statements,
reports of independent account firms and finally the notes to
financial statement (Nadella & London, 2018). These are most
import documents to the investors because they give financial
position of the company. It is from her that investors know
whether company is making profits or losses. Such documents
either scars away investors or invites them in.
The second issue is the executive and the management. The
company has seven senior management offices. The company is
lead by a chief executive officer. Below the chief executive
office are five executive vice presidents. The company resident
doubles as the chief legal officer. The chief executive office`s
name is Satya Nadella who was, according to the 2019 10K
report, appoint in the year 2014. The chief marketing officer,
one of the vice presidents was appointed in the year 2016. Other
vice presidents have always been appointing from the human
resource pool that the company has trained over the years.
Business: this issue covers the company mission and vision
about the future. It is in this section that the company explains
its products. Among the products offered by the company
include operating system, server application, tools to manage
server and desktop, video games, cross device productivity
application and also business solution application. The
ambition that drives the business in the to create more personal
computing power, to improve on the artificial intelligent and
finally to reinvent productive. The latest of its product is the
Azure SQL database where AI is incorporated in server
management (Microsoft, 2019).
The last issue addressed is the market for registration of the
common stock. In this section, the available information is
about the prices of the shares sold in the market. In accordance
with April 2019, there had been 8, 547, 612 shares that were
purchased at $ 122.85 and this was approximated to $ 14.55
billion. The dividend was declared on June 12 the same and
after recording on august 15, the were paid on September 12.

34. Each share received $ 0.46 and this total to $ 3.516 billion. The
Microsoft continues that $ 7.7 billion was return as repurchases
to shareholders.
References
Fitchett, L. (2019). A Strategic Audit of Microsoft Azure.
Microsoft, (2019). Annual Report 2019- Satya Nadella, Chief
Executive Officer. Retrieved from
https://www.microsoft.com/investor/reports/ar19/index.html
Nadella, S., & London, S. (2018). Microsoft’s Next Act. The
McKinsey Quarterly.