...1. This question addresses the effect of Microsoft’s software capitalization policy on its financial statements. Ignore any potential tax effects. Estimate the effect of capitalizing software costs on Microsoft’s fiscal 1997, 1998, and 1999 income statements and balance sheets. Assume that 1) 60% of Microsoft’s research and development expenses were incurred after technological feasibility was established, 2) the average product life was two years, 3) the company had always capitalized these costs; and 4) the company begins amortization capitalized software costs at the beginning of the following fiscal year. Briefly speculate as to why Microsoft chose to expense all software costs as incurred rather than capitalizing a portion of these costs. Answer: Microsoft chose to expense instead of capitalizing portion of all software costs incurred in spite of the fact that FASB guidelines require treatment of software development costs to be capitalized once technological feasibility was established. The reasoning could be the following: By the time the company determined the technological feasibility of their products may be so late in the development process that the amount of software costs eligible for capitalization are too small. The useful life of the product can be so short-lived that expensing costs as incurred can mostly be equivalent to capitalization 2. What impact did the company’s decision to adopt its new revenue recognition policy in 1996 have on the company’s...
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... Monthly Returns on MSFT, SBUX and S&P 500 0.0 -0.4 returns Returns on Microsoft Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1992 1993 1994 1995 1996 1997 1998 1999 2000 0.0 -0.4 returns Returns on Starbucks Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1992 1993 1994 1995 1996 1997 1998 1999 2000 -0.15 returns 0.05 Returns on S&P 500 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1992 1993 1994 1995 1996 1997 1998 1999 2000 © Eric Zivot 2006 1 Estimated Standard Errors > se.muhat = sigmahat.vals/sqrt(nobs) > rbind(muhat.vals,se.muhat) sbux msft sp500 muhat.vals 0.0277 0.0275 0.01253 se.muhat 0.0135 0.0106 0.00378 > se.sigma2hat = sigma2hat.vals/sqrt(nobs/2) > rbind(sigma2hat.vals,se.sigma2hat) sbux msft sp500 sigma2hat.vals 0.01845 0.01141 0.00143 se.sigma2hat 0.00261 0.00161 0.00020 > se.sigmahat = sigmahat.vals/sqrt(2*nobs) > rbind(sigmahat.vals,se.sigmahat) sbux msft sp500 sigmahat.vals 0.1358 0.1068 0.0378 se.sigmahat 0.0096 0.0075 0.0026 © Eric Zivot 2006 R function sample() # random permutations of the index vector 1:5 > sample(5) [1] 1 3 2 5 4 > sample(5) [1] 4 2 3 5 1 # random sample of size 5 from MSFT return with replacement ...
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...1. Índice DJIA al cierre de Noviembre 20 MSFT 2. Precio por acción común de Microsoft Corporation al cierre de Noviembre 20 Las acciones de MSFT al cierre de Noviembre 20 fueron de $ 48.70 3. Estimado del índice del DJIA MSFT al cierre de Dic 4 4. Un estimado del precio por acción común de MSFT al cierre de Dic 4 Para hacer una estimación puntual sobre las acciones establecidas en el DJIA de Microsoft para 15 días después de hoy, tomaremos en cuenta el recorrido que han venido tomando los índices en los últimos quince días. Si bien es cierto a partir del 18 de Noviembre ha existido un descenso en el valor de las acciones de MSFT, consideramos que a la larga existirán picos pequeños de descenso pero a su vez se mantendrá una proporción de crecimiento como vemos en el gráfico de datos históricos. En los últimos 15 días, la media de las acciones se encuentra en: Los últimos 15 días la media fue de 48,615; y en los últimos periodos hubo subidas y bajadas cada cierto tiempo y por consiguiente el precio por acción se mantuvo en este rango, es por eso que estimamos que en los 15 días siguientes, o al menos para el 4 de diciembre un estimado del precio por acción será de aproximadamente 48.5 y 49.0. Pero según vemos ha existido un crecimiento del 0,026% en los últimos 15 días y por eso creemos que seguirá creciendo en la misma proporción para los 15 días siguientes. Los últimos 15 días la media fue de 48,615; y en los últimos periodos hubo subidas y bajadas...
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...The Business Enterprise 508 Lisa Falls December 11, 2011 Microsoft Corporation and Apple Computers, Inc. Annual Report Comparison as we all know that both of these companies have become public figures names. Both companies have many divisions, and both manage extensive assets and liabilities. In searching various internet articles both reported large amounts of income, and the matter of accounting checks and balances becomes more complicated than many smaller companies. Apple, Inc. is Microsoft’s biggest competitor in designing and developing computer software. Apple was started in April of 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne. In January of 1977, Apple was incorporated but without Wayne. On September 7, 1984, Apple had its first initial public stock offering. It was also during this year that the Macintosh computer was introduced. 1985 brought some turmoil with the new CEO John Sculley and Steve Jobs, and Jobs was removed from his position with Apple. After many tumultuous years and mismanagement, Apple brought back Jobs as a consultant in 1996. In July 1997, after the CEO was let go, Jobs resumed his position as CEO. In May 2001, Apple opened its first retail store and later that year introduced the IPOD, which became a huge success for Apple, along with the release of the iMac computer. By 2006, Apple was using Intel chips solely for its computers. On January 9, 2007, Apple released the iPhone and Apple TV, which made Apple’s stock soar...
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...Financial Engineer Futures Trading, Risk Management, Business Development OGI School of Engineering at Oregon Health & Science University Adjunct Instructor Statistical Computing & Financial Time Series Analysis Electro Scientific Industries, Inc Director of Engineering, Vision Products Division Machine Vision and Pattern Recognition Started Using R in 1999 R Tools for Portfolio Optimization 2 Introduction DJIA: 12/02/2008 - 04/15/2009 100 GM C 80 IBM annualized return (%) JPM 60 INTC HD DD GE PG BAC R-SIG-FINANCE QUESTION: stock price 90 40 MMM 20 KFT XOM PFE CVX JNJ VZ HPQ MCD KO UTX WMT T CAT MRK AXP BA Can I do < fill in the blank > portfolio optimization in R? MSFT DIS AA 0 IBM: 12/02/2008 - 04/15/2009 0 100 5 10 conditional value-at-risk (%) 15 20 95 80 85 Maximum Drawdown Jan Mar ANSWER: drawdown (%) IBM Underwater Graph 0 -5 P/L Distribution -10 -15 Yes! (98% confidence level) 0.12 0.14 Jan Mar 0.10 VaR 0.08 Density CVaR 0.06 0.00 -15 0.02 0.04 -10 -5 daily return 0 5 10 R Tools for Portfolio Optimization 3 Outline Mean-Variance Portfolio Optimization quadratic programming tseries, quadprog Conditional Value-at-Risk Optimization linear programming Rglpk_solve_LP package General Nonlinear Optimization Differential Evolution Algorithm DEoptim package Omega Optimization...
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...pinpoint. PPE especially is a challenge. Microsoft has very specific equipment where it can be valued obsolete if a new component arrives ect. Demand can dictate volume/cycle usage of PPE. * Market to book ratio? B. Compare and contrast the extent to which the companies will likely meet their short-term obligations: Based on working capital and current ratio * Ryanair – Working capital looks to be improving over the past few years, however, looking at the current ratio, it’s been steady between 1.5-2. No concern here in meeting short term obligations * Microsoft – Big jump in working capital, +56% from last year AND current ratio is at an all time high of 2.60. Looks very healthy in meeting STO from this perspective. MSFT seems to be in good hands to outlast the financial crisis and even expand. Current ratio points to a very healthy expansion prospect. * Tim Hortons – Working capital is shy of the 5 year average of 200K, but this is due to an unusual increase in last year’s working capital of 517K. It’s difficult to tell how it’ll meet its STO based solely on this. Current ratio of 1.30 is indicating (this bump of 517K is due to Tim Hortons Inc. announced that the Company plans to complete the sale of its 50% interest in Maidstone...
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...Individual Assignment (8%): Website: http://finance.yahoo.com/q/pr?s=MSFT+Profile Microsoft Corporation One Microsoft Way Redmond, WA 98052 United States - Map Phone: 425-882-8080 Website: http://www.microsoft.com Details | | Index Membership: | N/A | Sector: | Technology | Industry: | Business Software & Services | Full Time Employees: | 118,000 | | Business Summary | | Microsoft Corporation, a technology company, develops, licenses, and supports software products, services, and devices worldwide. The company’s Devices and Consumer (D&C) Licensing segment licenses Windows operating system and related software; Microsoft Office for consumers; and Windows Phone operating system. Its Computing and Gaming Hardware segment provides Xbox gaming and entertainment consoles and accessories, second-party and third-party video games, and Xbox Live subscriptions; surface devices and accessories; and Microsoft PC accessories. The company’s Phone Hardware segment offers Lumia phones and other non-Lumia phones. Its D&C Other segment provides Windows Store and Xbox marketplace; search advertising; display advertising; Office 365 Home and Office 365 Personal; first-party video games; and other consumer products and services, as well as operates retail stores. The company’s Commercial Licensing segments licenses server products, including Windows Server, Microsoft SQL Server, Visual Studio, System Center, and related Client Access Licenses (CALs); Windows...
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...11/26/12 The Surprising Winner in the HP-Oracle Slugfest (HPQ, IBM, INTC, MSFT, ORCL) The Surprising Winner in the HP-Oracle Slugfest By Cindy Johnson | M ore Articles June 27, 2011 | Comments (1) Don't let it get aw ay! Keep track of the stocks that matter to you. Help yourself with the Fool's FREE and easy new watchlist service today. Sometimes the best way to win a fight is to work the sidelines. That doesn't seem to be lost on IBM (NYSE: IBM ) as Hewlett-Packard (NYSE: HPQ ) and Oracle (Nasdaq: ORCL ) go through the computer industry's version of a nasty breakup. As the Silicon Valley turns It started when Oracle tied the knot with Sun Microsystems in a January 2010 acquisition. Then HP sent former CEO Mark Hurd packing last August after -- long story short -- a Click Here Now contractor accused him of sexual harassment. Oracle's Larry Ellison rushed to publicly defend Hurd's honor and shortly thereafter offered Hurd a new home as co-president of the software giant. Now HP has sued Oracle, claiming its March 2011 decision to quit supporting Intel's (Nasdaq: INTC ) high-end Itanium processors is a breach of contract with HP. To be sure, Oracle wasn't the first software maker to stoke concerns about the future of Itanium -- and thus about HP's high-end systems. Microsoft (Nasdaq: MSFT ) and Red Hat (Nasdaq: RHT ) previously pulled support. Used to play well with others HP uses Itanium in mission-critical computers that compete with Sun's SPARC-based and IBM's...
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...from annual report tells us the potential for future growth. Keywords: Potential, Analyzing Microsoft Corporation’s Microsoft Corporation’s began on April 4, 1975, when Bill Gates and Paul Allen in Albuquerque founded it. On January 1, 1979, the company moved from Albuquerque to Bellevue, Washington and started mainly as a software development company creating operating systems for personal computers (PCs) and office productivity software for PCs. Today, Microsoft is a dominating leader in industries who is developing and supporting many software products for various computing devices in the world. The company also designs and sells hardware, and delivers online advertising to customers. Microsoft is listed in the Fortune 100. MSFT identified five major segments within the Microsoft Corporation and each segments has competition. 1) Window & windows Live Division: The windows operating system faces competition from various commercial software products, mainly from Apple and Google. 2) Server and Tools: Microsoft competes with open source software such as Apache, Linux, MySQL and PHP. 3) Online Services Division: OSD competes with Google and websites that provide online offerings to end-users. 4) Microsoft Business Division: Adobe, Apple, Cisco, Google, IBM, Oracle, SAP and numbers of Web-based application developers...
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... • Positive growth trends in major business segments, specifically Windows and Windows Live and Microsoft Business indicates a strong BUY rating. Continued dominance in the operating system market segment along with new products being introduced to consumers and businesses are expected to generate added revenue growth. • Cash Flows remain strong and large international reserves position Microsoft well to deploy capital should strategic acquisitions become available. • Outdated technology used by consumers has been revamped by Windows 8 and subsequent products which eliminate previous opinions of MSFT lack of innovation. This has resulted in positive reviews for new product lines. • A strategic shift in Microsoft's product release cycle creates the potential for new revenue streams and allows for updates to reach consumers in a shorter period of time. Starting in 2013, MSFT is making changes to the way products will be delivered, shortening the release cycle and moving more toward Software as a Service (SaaS) products. The new release cycles will create new revenue streams, previously associated with large product releases. Changes in philosophy towards iterative development lifecycle will reduce the development costs as customer input will be received earlier in the development lifecycle. • Market Outlook of Global IT Services- According to industry estimates, expenditures on IT services were expected to grow at a rate of 6% in 2012. Demand for IT services is likely to...
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...Running head: FINANCIAL MANAGEMENT Financial Management: Comparing Google’s Business Model/ Financial Management with Microsoft By: Zanthe Gillison Strayer University Financial Management: Comparing Google’s Business Model/ Financial Management with Bing Google is doing bigger and better things in the world of internet media searching. Despite the challenges with other big names in Internet technology, Google and Microsoft have still remained to be leaders. In this paper, I will show comparison views of Google’s business model and financial management with Microsoft’s launch with Bing. Taking a look into Google and Microsoft core business, leading products and services, management and leadership styles, and innovation track record we will have the opportunity to compare the two businesses in and appendix. Google is known to be the leading internet media website’s in the world. Google and Microsoft are well-known internet information websites. Although, Microsoft is in business for more than searching the internet, Microsoft is known to be the world’s leading producer and marketer of computer software. Google’s product line and services are for Google products only. Google’s products include services that will enhance your desktop features such as Google Chrome and Google desktop which is an organizational tool that gives the customer the option to design and edit photos, organize personal and business information, search, and communicate with...
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...When first embarking on the Stocktrak site I must admit I had very little experience with investing of any real kind. I was an amateur and I thought it would be a fun way to learn a little bit about the market and myself in how I might approach looking at investing and the kind of approach I would take. From the start I took a rather conservative approach to the entire thing. I roughly made about one trade a week and even didn’t make a trade in a week at all. Granted in a market that’s down a bit to maximize my earnings that might not have been the best approaches as the market didn’t not vary a whole lot, at least for what I had invested in, but I will get to that later. As far as what I hoped to get as a rough expected return was about 5-10%. I was hoping to make some money within the game but also not expecting huge profits based on the current financial climate and the amount of trading and effort put in for my more conservative portfolio. That return I was hoping to realize in the 10-week holding period but looking at it now with a change in the climate in future months it might be more realizable in an annualized holding period. Some constraints that I took into consideration while doing this project are not very severe and don’t entail a whole lot. When I took this project on I didn’t particularly see the 10 weeks as the final see all. I did not go and put all 500,000 directly into the market even though I used most of it. It was more long term probably closer to a...
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...a place known as Redmond. This Company manufactures, develops, licenses, sells and supports consumer electronics, computer software, services and personal computers. Bill Gates and Paul Allen initiated this Company way back in 1975. My client wishes to invest in Microsoft. Analyzing Microsoft stock and financial performance is critical to allow me advice my client appropriately. 2.0 An Overview of Microsoft Corporation Microsoft is best known for its software products such as the line of operating systems, Microsoft Windows, Internet Explorer, Microsoft Office suite, Skype and Edge web browsers. Microsoft is the world’s largest software producer or maker by revenue. Microsoft is one of the most valuable companies in the world (MSFT: Summary for Microsoft Corporation- Yahoo! Finance). Microsoft is a worldwide Company traded as NASDAQ component. It operates in the computer software and hardware industry. The chairperson of Microsoft Corporation is John W. Thompson. Bill Gates is the Founder and Technology Advisor. Brad Smith is the President and Satya Nadella the CEO (Microsoft – Official Home Page). As of 2015, Microsoft had a total revenue of US$ 93.58 billion, a net income of...
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...Final Portfolio Report F303 Andromeda B. Wicaksono 12-8-2011 I. Introduction Before I took this investment class I had no idea of how the trader trade the stocks or how they determine which stock is the best to buy or sell. Now, after almost 4 months since the first class of this subject begun, I have a much better understanding of the process in trading stocks or how we decide what kind of stock should we buy. My investment objective is I want to try to learn how to do this investment stuffs as much as I can. I want to have a good feeling of how we do this activity and I want to gain experience as much as possible from this activity. II. Explanation of 10 Stocks In this section, I’ll be explaining to you why I bought the stocks earlier in this semester. There are 10 stocks in total that I have bought. The reason I bought the GAME (Shanda Games) stock was I looked at the price when I bought it, and I pulled a conclusion based on what I see that the price of the stock was at the lowest point, so I decided to buy this stock. But in fact now, the stock is not at the best price to sell, I have a loss about $1,607. When I bought the BAC (Bank of America) stock I was purely just trying or experimenting what would happen to this stock in the middle of European crisis. And until this point, I have a loss about $1,474. I decided to buy AG (First Majestic Silver) stock because the price in sector mining was stable and at the decent position. Well I would say this...
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...Foundations of Finance Homework 3 Prof. Johannes Stroebel Due at the start of class 9 Topic 5: The Capital Asset Pricing Model 1. Assume the risk free rate equals Rf = 4%, and the return on the market portfolio has expectation E [RM ] = 12% and standard deviation σM = 15%. (a) What is the equilibrium risk premium (that is, the excess return on the market portfolio)? (b) If a certain stock has a realized return of 14%, what can we say about the beta of this stock? (c) If a certain stock has an expected return of 14%, what can we say about the beta of this stock? 2. You are given the following two equations: E(Ri ) = Rf + (E(RM ) − Rf )βi E(RM ) − Rf σp E(Rp ) = Rf + σM (1) (2) You also have the following information: E(RM ) = .15, Rf = .06, σM = .15. Answer the following questions, assuming that the capital asset pricing model is correct: (a) Which equation would you use to determine the expected return on an individual security with a standard deviation of returns =.5 and a β = 2? Given the parameters above, what is the expected return for that security? (b) Which equation would you use to determine the expected return on a portfolio knowing that it is an efficient portfolio (consisting of the market portfolio M combined with the 1 risk-free rate)? If you were told that the standard deviation of returns on that portfolio is equal to σM and you were given the above parameters, what is the expected return on that portfolio? (c) Can you determine the β of the portfolio...
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