“Principal Areas of Judgment”
Executive Summary This assignment will examine the “Principal Areas of Judgment” contained in the Annual Financial Reports and Statements of MSFT. We will examine the financial statements and through ratio analysis, comment on profitability, asset and debt utilization, liquidity management and returns on Equity. We will provide the shareholders with analysis and recommendations on their investment in MSFT. Our examination of the Financial Statements of MSFT, through the use of Ratios, demonstrated that MSFT are in good condition: 1. Profits remain high at 5 year average of 33.2%, despite pressure on margins. 2. Return on assets employed percentage of 16.6% and the Return on Equity percentage of 21.6% are acceptable.