Ratio Analysis of Microsoft Company; Task 1: 220 words with references
Lindsey Contractors’ borrowing agreements make certain demands on the business. Lindsey’s Long-Term Debt may not exceed Stockholder’s Equity, and the current ratio may not fall below 1.50. If Lindsey fails to meet this requirement, the company’s lenders can take over management of the corporation.
Current Liabilities have mounted faster than current assets, causing the current ratio to fall to 1.47. Before releasing financial statements, Lindsey management is scrambling to improve the current ratio. Th controller points out that an investment can be classified as either long-term or short-term, depending on management’s intention. By deciding to convert an investment to cash within one year, Lindsey can classify the investment as short-term – a current asset. On the controller’s recommendation, Lindsey’s board of directors votes to reclassify long-term investments as short-term. Ratio Analysis of Microsoft Company
1. Do you think that the actions taken by Lindsey’s controller and board of directors are ethical. Why or why not?
Task 2: 300 word with references
Ratio Analysis (attached)
Main Company: Microsoft
Competitor Company: Apple
Ratio Analysis; Microsoft Company; You are to perform a competitive ratio analysis and provide a section of your paper on this topic. Please note – the competitor company must be a US based company that is publicly traded with annual reports in US dollars. Detailed instructions are attached.
In the title to your posting, please indicate “Ratio Analysis” or “Cash Flow Analysis” along with the name of your chosen company.
Task 3: 250 words with references
Ethics Case
| DeVito Company operates in a state where corporate taxes and workmen’s compensation insurance rates have recently doubled. DeVito’s president has assigned you the task of preparing an economic analysis and making a recommendation about whether to move the company’s entire operation to Missouri. The president is slightly in favour of such a move because Missouri is his boyhood home, and he also owns a fishing lodge there. You have just completed building your dream house, moved in, and sodded the lawn. Your children are all doing well in school and sports and, along with your spouse, want no part of a move to Missouri. If the company does move, so will you because your town is a one-industry community, and you and your spouse will have to move to have employment. Moving when everyone else does will cause you to take a big loss on the sale of your house. The same hardships will be suffered by your coworkers, and the town will be devastated. In compiling the costs of moving versus not moving, you have latitude in the assumptions you make, the estimates you compute, and the discount rates and time periods you project. You are in a position to influence the decision single-handedly. Instructions Who are the stakeholders in this situation? What are the ethical issues in this situation? |
| What would you do in this situation? |
Task 4: 250 word with references based on this article
Warning signs your tax preparer could be a fraud (cnbc.com)
Ratio Analysis
This activity is designed to help you prepare your paper and is to be written in proper APA format. Before providing your write-up, please perform the following analysis for your chosen company. Ratio Analysis of Microsoft Company
Calculate the following ratios for your chosen company: Microsoft
https://www.sec.gov/ix?doc=/Archives/edgar/data/789019/000156459020034944/msft-10k_20200630.htm
Current Ratio
Return on common stockholder’s equity
Profit Margin
Return on Assets
Equity Ratio
Calculate these same ratios for another company in the same industry for the same period of time. Use at least 2 years of data. You can either choose another company and search the internet for the information, or choose another company in the same industry that one of your class members has chosen and use their posted information. You do not need to include or show your actual calculations, just the results.
Provide an analysis on the ratios that you calculated – what do they mean? How do they compare to the other company? Are there any trends of interest from year to year? Explore the details behind the numbers to explain them (this is what analysis is about).
Please write as if you were preparing a major section of your paper, using proper APA formatting (topic headings and in-text citations) and include references. Feel free to use tables, charts and graphs if you desire. It is suggested that you include a section for each ratio to discuss the nature of the ratio itself as well as your analysis.
Here are some pointers for writing this section of your paper:
- You should describe each ratio you are presenting and what it is used for.
- Avoid informal, conversational writing style (no slang terms, writing in the first person, etc.)
- Analysis goes beyond stating the obvious. So if you are including tables, or narrative, that show increases or decreases from year to year or differences between your chosen company and a competitor, don’t just note the differences. The reader can already deduce this from the table. Instead, focus on analyzing why there are differences or changes and research the details. Discuss what the differences mean (for example, is it better to have a higher or lower current ratio?) Even a “B” paper will need some level of analysis rather than just stating the numbers and whether or not they went up or down.
- Use more than one year of data. Ratio analysis is not as meaningful when it is based on one year alone.
- Include in-text citations in APA format when using information from another source. This does not just include direct quotes. And try not to use lengthy direct quotes unless there is something unique about the wording that needs to be preserved. Write in your own words.
- Make sure you use headers (in APA format) for each topic area.
Include the Balance Sheet and Income Statement (extracted from the 10-K report) for your company and your competitor company an attachment to your posting.