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Liquidity, activity, financial leverage analysis

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Response provides guidance regarding liquidity, activity, financial leverage, and profitability measures of Microsoft Corp

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11.12
Analysis of selected liquidity, activity, financial leverage, and profitability measures of Microsoft Corp.
Presented here are summarized data from the balance sheets and income statements of Microsoft Corp, a computer software company.
Condensed income statements and other data for the years ended June 30, 2006 and 2005
(in millions, except earnings per share)
2006 2005
Revenue................................................................................. $44,282 $39,788
Operating expenses:
Cost of revenue.............................................................. 7,650 6,031
Research and development.......................................... 6,584 6,097
Sales and marketing....................................................... 9,818 8,563
General and administrative........................................... 3,758 4,536
Total operating expenses...................................... $27,810 $25,227
Operating income................................................................. $16,472 $14,561
Investment income and other............................................ 1,790 2,067
Income before income taxes............................................... $18,262 $16,628
Provision for income taxes................................................... 5,663 4,374
Net income............................................................................. $12,599 $12,252
Earnings per share:
Basic..................................................................................... $ 1.21 $ 1.13
Diluted................................................................................. $ 1.20 $ 1.12
Market price per share at year-end.................................... $23.08 ...

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