FINANCIAL ANALYSIS OF MICROSOFT CORPORATION Years 2001 vs. 2002
             The purpose of the analysis which follows is to indicate the financial status of Microsoft for the year 2001 compared to 2002 in order to assess the company's strengths and weaknesses and to consider what changes may be needed to strengthen the company's financial standing. The report will be organized as follows: (1) Analysis of liquidity, (2) Activity Levels, (3) Profitability, (4) Coverage of Debt, and (5) Conclusions and other information from published sources. Our general conclusions were, with liquidity strong, profit margin and return on assets at or above industry standards, and future growth expected to be good, Microsoft stock, overall, would be a decent buy.
             The table below shows the Liquidity ratios for the years studied. These figures indicate that the company was fairly strong on liquidity. In 2001 they had over four times as many current assets available as current liabilities..
             Collecting receivables and selling inventory support the liquidity ratio above. The turnover ratios, which can also be expressed in days, indicate the company's speed or efficiency in selling inventory and collecting the receivables. The statistics below show that receivable turnover is low. A lower receivable turnover means higher average time between credit sales and cash collection, this means that they can't commit as much money to other purposes. Receivable turnover also declined slightly from 2001 to 2002, this could mean dissatisfaction with products, or a change in credit policy that grants extended credit terms in order to maintain customers. The latter could be why days to collect is so high. Inventory turnover was reasonable for 2001, but the low inventory level in that year could cause this. Inventory turnover declined sharply in 2002. Tying up too much capital in invento
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