The 2013 Microsoft form 10-k can be found at https://www.sec.gov/Archives/edgar/
ID: 2740394 • Letter: T
Question
The 2013 Microsoft form 10-k can be found at
https://www.sec.gov/Archives/edgar/data/789019/000119312513310206/d527745d10k.htm
Using the form 10-k, answer the following questions:
-Prepare a common size balance sheet for Microsoft for all years presented and the most resent 10k
-Describe the types of assets Microsoft owns. Which assets are the most significate to the company? Using the notes in the finical statements, discuss the accounting methods used to value assets. What other information can be learned about the assets accounts from the notes? Have there been significate changes to the assets structure from 2012 to 2013?
-Analyze the accounts receivable and allowance for doubtful accounts
-Describe the type of liabilities Microsoft has incurred. What liabilities are the most significant to the company? Have these been significant changes to the liabilities and equity structure from 2012 to 2013?
-Describe the commitments and contingencies of Microsoft
-Under which classifications are deferred taxes listed? What items is the most significant component of deferred taxes?
-What equity accounts are included on the balance sheet of Microsoft
Explanation / Answer
1. Common size balance sheet for the years 2013 and 2012:
2. The types of assets owned by Microsoft are current assets, property and equipment, goodwill, investments and other long term assets. Short term investments are most significant for Microsoft as it formed 51.41% of total assets in 2013 and 46.26% of total assets in 2012. Certain assets are valued at fair value. Microsoft's current assets have fair values that approximate their carrying values. PPE are stated at cost, net of depreciation. Goodwill is tested for impairment and intangible assets are subjected to ammortization. No, there has been no significant changes in the asset structure from 2012 to 2013.
3. Accounts receivables stood at $17,486 millions in 2013 (12.28% of total assets). In 2012 it was $15,780 millions (13.01% of total assets).
Allownace for doubtful debts:
4. The liabilities that Microsft has incurred are current liabilities, long term debt, long term unearned revenue, deferred income taxes and other long term liabilities. Short term unearned revenue is the most significant liability and stood at 14.49% of total liability in 2013 and 15.31% in 2012. There has been no significant changes to the liabilities and equity structure from 2012 to 2013 except for retained earnings. Retained earnings was 6.95% of the total in 2013 compared to -0.71% in 2012.
(in $ millions) for 2013 (in $ millions) for 2012 (in % for 2013) (in % for 2012) Assets Current Assets Cash 3,804 6,938 2.67% 5.72% Short term investments 73,218 56,102 51.41% 46.26% Accounts receivables 17,486 15,780 12.28% 13.01% Inventories 1,938 1,137 1.36% 0.94% Deferred income taxes 1,632 2,035 1.15% 1.68% Other 3,388 3,092 2.38% 2.55% Total current assets 101,466 85,084 71.24% 70.16% PPE 9,991 8,269 7.01% 6.82% Equity and other investments 10,844 9,776 7.61% 8.06% Goodwill 14,655 13,452 10.29% 11.09% Intangible assets 3,083 3,170 2.16% 2.61% Other long term assets 2,392 1,520 1.68% 1.25% Total assets 142,431 121,271 100.00% 100.00% Liabilities Current liabilities Accounts payable 4,828 4,175 3.39% 3.44% Current portion of long term debt 2,999 1,231 2.11% 1.02% Accrued compensation 4,117 3,875 2.89% 3.20% Income taxes 592 789 0.42% 0.65% Short term unearned revenue 20,639 18,563 14.49% 15.31% Securities lending payable 645 814 0.45% 0.67% Other 3,597 3,151 2.53% 2.60% Total current liabilities 37,417 32,688 26.27% 26.95% Long term debt 12,601 10,713 8.85% 8.83% Long term unearned revenue 1,760 1,406 1.24% 1.16% Deferred income taxes 1,709 1,893 1.20% 1.56% Other liabilities 10,000 8,208 7.02% 6.77% Total liabilities 63,487 54,908 44.57% 45.28% Common stock 67,306 65,797 47.26% 54.26% Retained earnings 9,895 -856 6.95% -0.71% Accumulated other income 1,743 1,422 1.22% 1.17% Total equity 78,944 66,363 55.43% 54.72% Total liability and equity 142,431 121,271 100.00% 100.00%Related Questions
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