Microsoft Identify and Explain the Main Sections

Microsoft

Identify and explain the main sections of the annual report.

The annual report has a number of different sections that are designed to explain the fiscal state of the firm. The most notable include: the business description, discussion & analysis, market risk, income statements, balance sheet, shareholders equity, auditor's reports and controls / procedures. The business description is focusing on describing where the firm is making money and new areas they are moving into. The discussion and analysis is examining how these changes are impacting the company's ability to compete. Market risk is examining Microsoft's exposure to fluctuations in the currency, commodities and equity indices. Income statements are looking at how much money the firm is making and its impact on different operations. The balance sheet is examining the levels of debt in contrast with the liquidity and earnings of the firm. Shareholders equity is looking at how effectively the company is taking the working capital they receive from investors and is making it grow. The auditor's report is identifying critical areas of concern and how they were addressed to improve the accuracy of the information. Controls and procedures are explaining the way oversight is conducted and the long-term effects on stakeholders. ("Annual Report," 2013) (Standard and Poor's, 2013) ("Microsoft," 2013) (Plunkett, 2012)

Discuss the key factors that influenced the company's financial performance during the year.

The biggest factor that influenced the company's performance was the tremendous amounts of competition they are facing in the last year. This is because technology is shifting and a number of firms are positioning themselves to be the most dominate player inside the technology sector. The key for Microsoft is continuing to adjust with these changes and remaining relevant. As a result, the company is focused on providing consumers and businesses with those products / services that will work on a number platforms / applications. The most notable include: PCs, laptops, tablets, mobile phones, portable gaming technology, servers, cloud computing and software. ("Annual Report," 2013) (Standard and Poor's, 2013) ("Microsoft," 2013) (Plunkett, 2012)

Discuss the primary assets held by the company.

Microsoft has a total of $142 billion in assets. This is up from $121 billion in 2012. The different areas held by the company include: real estate, cash instruments, inventories, accounts receivable, equity investments, goodwill and equipment. This is counted as an asset depending upon the rate of depreciation / total return and how it is applied. As a result, the firm's primary assets have been steadily increasing by 17% in one year. This is a sign that the company is making the right choices and offering consumers with the products they demand. ("Annual Report," 2013) (Standard and Poor's, 2013) ("Microsoft," 2013) (Plunkett, 2012)

Explain how management characterizes the internal control environment of the company.