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Please view the 2020 income statements and balance sheets for Microsoft. 1. What does margin measure? Describe this in your own words. Writing a formula is not a sufficient answer.   2. What was Microsoft's 2020 margin?   3. What is one specific way that Microsoft could increase its margin? Please number your responses.

Please view the 2020 income statements and balance sheets for Microsoft. 1. What does margin measure? Describe this in your own words. Writing a formula is not a sufficient answer.   2. What was Microsoft's 2020 margin?   3. What is one specific way that Microsoft could increase its margin? Please number your responses.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Please view the 2020 income statements and balance sheets for Microsoft.
1. What does margin measure? Describe this in your own words. Writing a formula
is not a sufficient answer.
 
2. What was Microsoft's 2020 margin?
 
3. What is one specific way that Microsoft could increase its margin?
Please number your responses.
INCOME STATEMENTS (In millions, except per share amounts) Year Ended June 30, 2020 2019 2018 Revenue: Product Service and other $ 68,041 $ 66,069 $ 64,497 59,774 74,974 45,863 Total revenue 143,015 125,843 110,360 Cost of revenue: Product Service and other 16,017 30,061 16,273 26,637 15,420 22,933 Total cost of revenue 46,078 42,910 38,353 Gross margin Research and development Sales and marketing 96,937 19,269 19,598 5,111 82,933 16,876 18,213 4,885 72,007 14,726 17,469 4,754 General and administrative Operating income Other income, net 52,959 42,959 729 35,058 1,416 77 Income before income taxes 53,036 8,755 43,688 4,448 36,474 19,903 Provision for income taxes Net income $ 44,281 $ 39,240 $ 16,571 Earnings per share: Basic 5.82 $ 5.76 $ 5.11 $ 5.06 $ 2.15 2.13 Diluted Weighted average shares outstanding: Basic 7,610 7,683 7,673 7,753 7,700 7,794 Diluted Refer to accompanying notes.
Transcribed Image Text:INCOME STATEMENTS (In millions, except per share amounts) Year Ended June 30, 2020 2019 2018 Revenue: Product Service and other $ 68,041 $ 66,069 $ 64,497 59,774 74,974 45,863 Total revenue 143,015 125,843 110,360 Cost of revenue: Product Service and other 16,017 30,061 16,273 26,637 15,420 22,933 Total cost of revenue 46,078 42,910 38,353 Gross margin Research and development Sales and marketing 96,937 19,269 19,598 5,111 82,933 16,876 18,213 4,885 72,007 14,726 17,469 4,754 General and administrative Operating income Other income, net 52,959 42,959 729 35,058 1,416 77 Income before income taxes 53,036 8,755 43,688 4,448 36,474 19,903 Provision for income taxes Net income $ 44,281 $ 39,240 $ 16,571 Earnings per share: Basic 5.82 $ 5.76 $ 5.11 $ 5.06 $ 2.15 2.13 Diluted Weighted average shares outstanding: Basic 7,610 7,683 7,673 7,753 7,700 7,794 Diluted Refer to accompanying notes.
PART II Item 8 BALANCE SHEETS (In millions) June 30, 2020 2019 Assets Current assets: Cash and cash equivalents $ 13,576 $ 122,951 11,356 122,463 Short-term investments 136,527 Total cash, cash equivalents, and short-term investments Accounts receivable, net of allowance for doubtful accounts of $788 and $411 Inventories 133,819 32,011 1,895 11,482 29,524 2,063 10,146 Other current assets Total current assets 181,915 175,552 Property and equipment, net of accumulated depreciation of $43,197 and $35,330 Operating lease right-of-use assets Equity investments Goodwill 44,151 8,753 2,965 43,351 7,038 13,138 36,477 7,379 2,649 42,026 7,750 14,723 Intangible assets, net Other long-term assets Total assets $ 301,311 $ 286,556 Liabilities and stockholders' equity Current liabilities: Accounts payable Current portion of long-term debt Accrued compensation $ 12,530 $ 3,749 7,874 2,130 36,000 10,027 9,382 5,516 6,830 5,665 32,676 9,351 Short-term income taxes Short-term unearned revenue Other current liabilities 72,310 59,578 29,432 3,180 204 7,671 10,632 69,420 66,662 29,612 4,530 233 6,188 7,581 Total current liabilities Long-term debt Long-term income taxes Long-term unearned revenue Deferred income taxes Operating lease liabilities Other long-term liabilities Total liabilities 183,007 184,226 Commitments and contingencies Stockholders' equity: Common stock and paid-in capital – shares authorized 24,000; outstanding 7,571 and 7,643 Retained earnings Accumulated other comprehensive income (loss) 80,552 34,566 3,186 78,520 24,150 (340) Total stockholders' equity 118,304 102,330 Total liabilities and stockholders' equity $ 301,311 $ 286,556
Transcribed Image Text:PART II Item 8 BALANCE SHEETS (In millions) June 30, 2020 2019 Assets Current assets: Cash and cash equivalents $ 13,576 $ 122,951 11,356 122,463 Short-term investments 136,527 Total cash, cash equivalents, and short-term investments Accounts receivable, net of allowance for doubtful accounts of $788 and $411 Inventories 133,819 32,011 1,895 11,482 29,524 2,063 10,146 Other current assets Total current assets 181,915 175,552 Property and equipment, net of accumulated depreciation of $43,197 and $35,330 Operating lease right-of-use assets Equity investments Goodwill 44,151 8,753 2,965 43,351 7,038 13,138 36,477 7,379 2,649 42,026 7,750 14,723 Intangible assets, net Other long-term assets Total assets $ 301,311 $ 286,556 Liabilities and stockholders' equity Current liabilities: Accounts payable Current portion of long-term debt Accrued compensation $ 12,530 $ 3,749 7,874 2,130 36,000 10,027 9,382 5,516 6,830 5,665 32,676 9,351 Short-term income taxes Short-term unearned revenue Other current liabilities 72,310 59,578 29,432 3,180 204 7,671 10,632 69,420 66,662 29,612 4,530 233 6,188 7,581 Total current liabilities Long-term debt Long-term income taxes Long-term unearned revenue Deferred income taxes Operating lease liabilities Other long-term liabilities Total liabilities 183,007 184,226 Commitments and contingencies Stockholders' equity: Common stock and paid-in capital – shares authorized 24,000; outstanding 7,571 and 7,643 Retained earnings Accumulated other comprehensive income (loss) 80,552 34,566 3,186 78,520 24,150 (340) Total stockholders' equity 118,304 102,330 Total liabilities and stockholders' equity $ 301,311 $ 286,556
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