Microsoft was founded in 1975 by Bill Gates and provides products, services, and devices in 190 countries around the world. They sell a wide variety of goods and services including laptop and desktop computers, video games and systems, applications for both phones and computers, and cell phones among other things. Their strategy is designed to allow them to accomplish three key goals: “reinvent productivity and business processes”, “build the intelligent cloud platform”, and “create more personal computing” (Microsoft Form 10-K). The main competitor for Microsoft today is Apple, who competes with Microsoft with its own line of laptops, cloud services, and phones. All of these devices use Apple operating systems and software which are direct …show more content…
This ratio shows Microsoft has a slight edge over Apple as it shows Microsoft has greater ability to meet its current obligations given its current assets. Both firms, however, would be able to meet their outstanding current liabilities if needed by liquidating their current assets, as evidenced by a current ratio of greater than 1. From a risk perspective, Microsoft has little to worry about as far as default risk goes as it can easily meet its debt payments with its current assets. The next relevant financial ratio to consider is the debt-to-equity ratio of each company. Microsoft has a debt-to-equity ratio of 1.69 and Apple has a ratio of 1.51. This means that Microsoft finances using more slightly more debt relative to Apple, whereas Apple uses slightly more equity. The “leverage” of a company is important because the more debt a company carries, the greater its interest payments are and the greater the chance of default risk and bankruptcy if the firm cannot meet these payments. Another good way to look at these numbers it to state the debt as a percentage of total funding (liabilities plus equity). This shows that …show more content…
Cyber-attacks and security is the biggest risk as losses from this could be catastrophic (Exhibit 1), and these attacks are much more common occurrences today (Exhibit 2). As an article from the NY Times states, it is wise to transfer these risks through cyberattack insurance as a company like Microsoft cannot entirely avoid this risk. It is difficult and costly to insure all of this risk, especially for a firm as big as Microsoft, so Microsoft should transfer as much as they reasonably can and seek to control loss for the rest through extensive cyber-security measures (Perlroth and Harris). The next risk for the firm is failed projects. With Microsoft being as innovative as it is, there are many projects it takes on, and these projects can make a lot of money or lose a lot of money for the firm. It is obviously important to avoid these projects that will cost the firm a lot in revenue through thorough project analysis. It is impossible, however, to avoid all projects, so Microsoft must retain and control loss on the projects that begin to fail by keeping the option to abandon a project or salvage the invested assets for another project. The third risk is disclosure of personal data. This is a huge issue for any company utilizing storage in the cloud. It can cause huge losses as customers whose
By 1993 Microsoft's windows computer programming function became the most widely used operating system in the world. When Microsoft was still an idea, Bill Gates led Apple to believe he would help them succeed in creating the best computer programming systems in the nation, however, Gates left it unknown to Apple he planned to release his own software. Gates took notes and allowed Apple to release the software he helped them to create. Then shortly after, Microsoft introduced windows. Apple claimed Gates had stolen their ideas, as windows looked surprisingly similar to Apple's version. Gates claimed he used his own ideas because it was his own that made Apple's renowned software. As Microsoft was leading in the world, Apple threatened Microsofts position in the world of technological advances by introducing a new software program that could potentially take Microsoft's top spot in the market away from them. Gates quickly said that he had created a new software that was set to release also, although he had no idea of new software at the time and made the excuse to possibly buy himself a bit of time. About eight months later, Microsoft released the new software program, as bill gates had proclaimed, retaining the top spot in the market. Microsoft's expansion today has reached every technological realm possible. Occluded in the newest developments are
The debt ratio is calculated using short term and long term debt relative to the total assets of an organization. The higher this figure is, the riskier a financial investment the organization is. The industry average has a debt ratio of 55%, a more promising figure than Happy Hamburger had before its increases, 68%. The debt ratio would have been considered a weakness for Happy Hamburger, but with the increased figures taken into consideration, this figure is a strength for Happy Hamburger at 39%, a more favorable figure than the industry average and indicating the organization is a less risky
Financial leverage ratio that is the most appropriate is the Debt to Equity Ratio. The Debt to Equity ratio measures the amount of debt a company uses to finance their assets relative to the amount of shareholder’s equity. The higher the debt to equity the more debt is used to finance the business. Boeing obtained a ratio of 1.5728 and the Industry has a 1.7587 or in other words Boeing uses 18.59% less debt to finance their company.
When comparing the debt-to-assets ratio of McDonalds and Wendys, you have to divide the firms total liabilities by their total assets. Essentially, the debt-to-assets ratio is the primary indicator of the firms debt management. As the ratio increases or decreases, it indicates the firms changing reliance on borrowed resources. The lower the ratio the more efficient the firm will be able to liquidate its assets if operations were discontinued, and debts needed to be collected. In 2005 Wendy's had $2,076,043 worth in total assets and $846,264 in total liabilities. When divided, Wendys has the lower ratio of the two competitors at 40%. This means that they would take losses of 40% if operations were shut down, and the cash received from valuable assets would still be sufficient to pay off the entire debt. It also means that 40% of Wendys assets are made through debt. McDonalds in 2005 had $12,545.3 (in millions) of total liabilities and $22,534.5 (in millions) of total assets. After doing the math, McDonalds ends up with a ratio of 56% which is higher than Wendys by sixteen percent. This means that there is more default on McDonalds liabilities, which can be a costly event from lenders perspective. McDonalds makes 56% of all its assets through debt. In reality, its not good to have a debt-to-assets ratio over 50%. Its also not good to have a debt-to-assets ratio that is too low because...
Microsoft has devoted huge amounts of effort to marketing in developing their products and services, as well as to the integration of their software products with one another in an attempt to create a seamless and consistent computing environment for the user.
Apple’s debt to equity ratio is not very high compared to the industry average of 2.23. The Debt to Equity Ratio of 2014 is 1.08, in which the normal ratio should be less than 1. This ratio of 1.08 shows that the company is financing more assets with debt than equity. In spite
In the eyes of lenders and investors companies with higher debt ratios are considered to be more risky because it highlights the total amount of debt burden it has undertaken. This means that if there is a higher reliance on debt external parties will not invest in the company. The importance of a lower debt ratio is highlighted in Zhou (2014) paper on optimal debt ratio, Zhou (2014) links the highly publicised 2008 global financial crisis with firms and their inability to service their own debts, and they also state that excessive debt poses a significant systematic risk to the financial structure of
"Microsoft Corporation, is a multinational computer technology corporation with global annual revenue of US$44.28 billion and 71,553 employees in 102 countries as of July 2006. It develops, manufactures, licenses, and supports a wide range of software products for computing devices. Headquartered in Redmond, Washington, USA, its best selling products are the Microsoft Windows operating system and the Microsoft Office suite of productivity software, each of which has achieved near-ubiquity in the desktop computer market. Microsoft possesses footholds in other markets, with assets such as the MSNBC cable television network, the MSN Internet portal, and the Microsoft Encarta multimedia encyclopedia. The company also markets both computer hardware products such as the Microsoft mouse as well as home entertainment products such as the Xbox, Xbox 360 and MSN TV" ("Microsoft").
In this paper, team B will discuss the internal and external factors of the Microsoft Corporation. We will explain how these factors affect the four functions of management, planning, organizing, leading, and controlling. Also, we will explain how globalization, technology, innovation, diversity and ethics will be delegated to manage the different factors. Microsoft Corporation was established in 1975 in Albuquerque, New Mexico producing software for developing, manufacturing, licensing, and support for range of software products and service for different type of computing devices. Microsoft grew from six employees to the largest personal computer software company in the world. By 1978, Microsoft earned $500,000 in the first quarter, and by the end of the year they earned revenue of $1,000,000. In the early 1980s Microsoft, in collaboration with IBM they released MS-DOS as their first 16-bit operating system. However after the late 1980s, Microsoft started to build its reputation by creating the Microsoft windows operating system and Microsoft office product, which includes internet explorer, excel, PowerPoint, and word programs. Then in the late 1990s, Microsoft teamed with Sega to incorporated their windows software package into the game developer’s Dreamcast hardware. Also they developed their own gaming system called the Xbox and that eventually was replaced by the xbox360. Microsoft has come a long way and is no longer just a worldwide leader in computer programming but also a major part of the technology world. Microsoft windows have been the flagship and accounts for most of its revenue for Microsoft: but the company has also branched ...
Microsoft is a computing software company. Microsoft was made and founded on April 4th 1975 by two young men who were captivated by computers. Their names were Bill Gates and Paul Allen. The homebase was in Redmond, Washington. Microsoft became one of the most famous and successful companies in the world. “Microsoft was one of the pioneers responsible for bringing the personal computer into the lives of millions of people.” (Musolf). The company has had such a great impact that now the name “Microsoft” is now virtually synonymous with computer software.
Microsoft’s mission of placing a “PC running Microsoft software on every desk and in every home” drove their overall strategy early on. Depending on the business segment within Microsoft, one would see in place very different business models as the strategy for each line of business could vary. In the operating system (OS) segment, Microsoft initially brought in an existing product and modified this (MS-DOS) to work with the Intel microprocessor, which were the “brains” of the IBM PC. Microsoft partnered with IBM to provide the operating system for the IBM PC. In addition to developing Windows, Microsoft during this period was working to write applications for the Apple OS.
Microsoft is one of the most recognisable, profitable and valuable companies in the market today. One of the popular versions of Microsoft windows, Windows Vista, is the topic that will be discussed. Microsoft is referred to as a monopoly in the market because it is a single supplier with exclusive ownership of a unique product (Economics Online, n.d.). Microsoft holds a patent which essentially gives the producer exclusive rights to sell the product and as a result they are able to completely dominate control over the software ‘Vista’. “Patent and copyright laws are easy to see because these laws give one producer monopoly, they lead to higher prices than would occur under competition.” (Gans, King, Stonecash, & Mankiw, 2012, pg. 325). Microsoft can gain substantial profits, and “would be able to derive the greatest monopoly power.” (Economics Online, n.d.).
I believe that Microsoft has the best intensions for society, because they are constantly developing the software market into a more competitive and challenging industry. Microsoft’s success as a company is partly due to its commitment to making the best product possible and strategic business practices. The first reason Microsoft is not a monopoly is because of the standardized quality of its OS. Second is the intelligent business practices Microsoft has engaged in through many of its business partners. The legal issues of the alleged antitrust accusations from the department of justice are just totally overrated.
This essay plans to focus on the corporate strategy of Microsoft, and show how Microsoft has used diversification successfully within their corporate strategy to gain a competitive advantage.
Microsoft is the leading and the largest Software Company in the world. Found by William Gates and Paul Allen in 1975 Microsoft has grown and become a multibillion company in only ten years. It all started with a great vision – “a computer on every desk and every home” - that seemed almost impossible at the time. Now Microsoft has over 44,000 employees in 60 countries, net income of $3.45 billion and revenue of 11.36 billion. Company dramatic growth and success was driven by development and marketing of operational systems and personal productivity applications software.