What return would you have earned investing in Microsoft’s stock? Would you have under or outperformed the market? How much of the performance can be attributed to Microsoft’s management?

Microsoft

Discuss these topics:

à Microsoft – publicly traded company with at least 5 years of trading history and 5 sets of annual financial statements

1. Is Microsoft a company where there is a separation between management and ownership? If so, how responsive is management to stockholders?
   1. What are other potential conflicts of interest with Microsoft?
   2. How does Microsoft interact with financial markets? How do markets get information on Microsoft?
   3. How does Microsoft view its social obligations and manage its image in society?
2. Stockholder analysis: What is the breakdown of stockholders of Microsoft – insiders, individuals, and institutional?
3. Balance sheet and cash flows
   1. Calculate liquidity, debt, and profitability rations and show their trends.
   2. What happened to Microsoft’s income, assets, debts, and cash flows during the periods and why?
4. Risk and return
   1. What is the risk profile of Microsoft? How much overall risk? Where does this risk come from (market, firm, industry, or currency)? How is the risk profile changing?
   2. What return would you have earned investing in Microsoft’s stock? Would you have under or outperformed the market? How much of the performance can be attributed to Microsoft’s management?
5. Measuring investment returns
   1. Is there a typical project for Microsoft? If yes, what does it look like in terms of life (long term or short term), investment needs and cash flow patterns?
   2. How good are the projects that the company has on its books currently?
   3. Are the projects in the future likely to look like the projects in the past?
6. Strengths and weaknesses of Microsoft
7. Suggestions for improvement for Microsoft