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Weekly Article Summary 1

Find and read a nursing scholarly article that relates to your clinical practice and is found in a peer-reviewed journal. Follow the instructions for the format in course textbook and write a 1-page summary.

The weekly article summary assignment starts from Module 1 through Module 6. Each summary is due in the following module. For example, Article Summary 1 must be submitted by 11:59 PM ET Sunday in Module 2, and Article Summary 6 must be submitted by 11:59 PM ET Sunday in Module 7.

Submission Instructions:

· Must be a research article. Write a 1-page summary using an outline of the steps of the research process stated in the course textbook. Discuss the study type, purpose, and research question(s).

· The summary is to be clear and concise and students will lose points for improper grammar, punctuation and misspelling.

· The summary should be formatted per current APA and 1 page in length, excluding the title page and references page. No abstract needed.

· Incorporate a minimum of 2 current (published within last five years) scholarly journal articles or primary legal sources (statutes, court opinions) within your work.

Read

· LoBiondo-Wood, G. & Haber, J. (2014). Nursing research: Methods and critical appraisal for evidence-based practice (8th ed.). Mosby, an imprint of Elsevier, Inc.

· Chapters 1, 2, & 20

· Use Chapter 1 Box 1-1 Highlighting Critical Reading Strategies (p. 11) as you read research/inquiry articles throughout this course.

Running Head: MICROSOFT Annual Report Project 3 1

MICROSOFT 9

Annual Report Project 3

Lakisha Trammel

Dr. Ron Stunda

GUC

ACC-616-0500

January 27, 2021

Introduction

The main purpose of this report is to analyze horizontally and vertically, both income statement and balance sheet within the last three years of Microsoft. The years we are looking for are from 2018 – 2020, with June 30th, year-end date.

Vertical and Horizontal Analysis of Income Statement

Microsoft’s vertical income statement demonstrations that the company has increased its bottom-line profitability, and has done so by improving their controlling expenses. The cost of revenue decreased from 34.8% in 2018 to 34.1% in 2019, and then decreased to 32.2% in the financial year ended on June 30, 2020. That caused the gross profit to increase from 65.2% to 67.8% over the same time period.

The company controlled its expenses by covering them in a regular manner. As a result, the ratio for SG&A expenses decreased from 20.1 % to 18.4 % in 2011, to 17.3 % in 2012, and then further decreased to 16.7 % in 2016 and then further to 16.3 % in 2017.

However, the company has gradually increased its R&D expenses as it is necessary for the development and growth of the company. In turn, operating profits more than doubled from 31.8% in 2018 to 37% in 2020. Non-operating costs also declined by a small amount in the second year compared to the first. The overall amount of taxable income increased from 33.1% in 2018 to 34.7% in 2019, and then to 37.1% in 2020.

Although income tax expenditure as a proportion of federal revenue decreased from 18% in 2018 to 6.1% in 2020, it continues to decrease in figures. With the rise of every fiscal year, the net income rose from 15%, 2018 to more than 31% by the end of the calendar year 2020.

Microsoft’s revenue increased % for 2019 as opposed to 2018, and then increased 13.6 % in 2020. In 2018, the lower sales cost decreased faster than the beginning and advancing of the 2018-2020 period, but in 2019 and 2020, the income revenue jumped by 11.9% in 2019 and 7.4% in 2020, respectively.

Aside from the double-digit increase in revenues and gross profit for both years, the growth in these two segments was also higher than the growth in revenue. As a result of improvements in advertisement, revenues, and general and administrative cost costs, a larger amount of revenue was achieved. However, non-operating income has been declining since last year, and this year’s decrease does not appear to be related to interest income. Income taxes decreased by 78 % in 2018, but jumped back up to an unexpected level in 2020. As a result, net income rose by 136.8% in 201, a further 12.8% in 2020.

Balance Sheet Vertical and Horizontal Analysis

The percentage by which cash and cash equivalents fell in the last three years from more than half to less than half of total deposits. Inventory levels declined as compared to years past while receivables and other current assets increased a tiny amount. Since 2018, total current assets fell by 2%, from $29 billion to $28.4 billion. The decrease in your current assets will help you decrease your current liabilities. Yet liability remains roughly the same over the past three years.

Total liabilities increased, but assets increased. Even more impressive is the increase in net worth since depreciation, and also the increase in property, plant and equipment, because of depreciation. The result of all these factors was that both tangible and intangible assets increased. It rationalizes the decline in assets, mostly cash, as the company has misused some of its internal capital to fund a few acquisitions. The long term investments have been increasing over time, albeit at a slow pace.

Current liabilities have increased substantially, but not enough to offset the large increase in provisions and other current liabilities.

Even though the inventory of current and non-current assets are low, the stocks of non-current assets decreased gradually over the last three years and reached 60.7 % of the total assets.

The amount of long term debt, which is declining, was on a rise up to a number of 28.0%, then it went down to 22.1%. The amount of both payable and accrued liabilities has declined slightly over the last three years, but remains small compared to the total assets of the company. As a result, total liabilities decreased from 45.4% down to 37.7%

The stock price increased due to the issuance of new shares and retained earnings. In short, in 2018, the retained earnings amount decreased to 5.3% while in 2020, the retained earnings percentage continues to rise up to 11.5%.

Overall total current assets increased as the level of current assets increased.

The horizontal review in the balance sheet reveals that cash, inventory, and investments rose marginally in 2020 as compared to 2019.

The total value of non-current assets also increased with the rise in the value of the company’s plant and equipment. Over time the overall investments increased but the percentage of total investments decreased. Some assets are expected to decrease by more than 11% in 2020 compared to the previous year while others are expected to rise by just about 98% in 2019.

The liabilities are expected to grow by 18.7% in the next three years and around 4.2% in the next two years. The main part of the rise came from the summer expense of development due to provisions and borrowing and from other current liabilities.

Long-term liabilities in the company’s balance sheet dropped considerably as the company paid down long-term debt. Other non-current liabilities, however, are actually increasing in the past few years.

Although total equity increased in the first half of this year, half of the increase came from the issuance of new equity.

References

Microsoft, (2020). Annual Report 2020- Satya Nadella, Chief Executive Officer. Retrieved from https://microsoft.gcs-web.com/static-files/4e7064ed-bbf7-4140-a8cb-79aba77421b9

Microsoft, (2019). Annual Report 2019- Satya Nadella, Chief Executive Officer. Retrieved from https://www.microsoft.com/investor/reports/ar19/index.html

Nadella, S., & London, S. (2018). Microsoft’s Next Act. The McKinsey Quarterly.

Appendix

Total Current Assets18191517555216966260.4%61.3%65.5%

Deferred Costs/Assets, Current

Total Non-Current Assets1193961110048918639.6%38.7%34.5%

Net Property, Plant and Equipment52904438563614617.6%15.3%14.0%

Net Intangible Assets50389497764373616.7%17.4%16.9%

Total Long Term Investments2965264918621.0%0.9%0.7%

Other Non-Current Assets131381472374424.4%5.1%2.9%

Total Assets301311286556258848100.0%100.0%100.0%

Financial Liabilities, Current3749551639981.2%1.9%1.5%

Provisions, Current7874683061032.6%2.4%2.4%

Deferred Liabilities, Current36000326762890511.9%11.4%11.2%

Other Current Liabilities10027935187443.3%3.3%3.4%

Total Current Liabilities72310694205848824.0%24.2%22.6%

Long Term Debt59578666627224219.8%23.3%27.9%

Capital Lease Obligations, Non-Current7671618855682.5%2.2%2.2%

Tax Liabilities, Non-Current2042335410.1%0.1%0.2%

Deferred Income/Customer

Advances/Billings in Excess of Cost, Non-Current3180453038151.1%1.6%1.5%

Payables and Accrued Expenses, Non-Current2943229612302659.8%10.3%11.7%

Other Non-Current Liabilities10632758152113.5%2.6%2.0%

Total Non-Current Liabilities11069711480611764236.7%40.1%45.4%

Total Liabilities18300718422617613060.7%64.3%68.0%

Equity Attributable to Parent Stockholders1183041023308271839.3%35.7%32.0%

Paid in Capital80552785207122326.7%27.4%27.5%

Retained Earnings/Accumulated Deficit34566241501368211.5%8.4%5.3%

Reserves/Accumulated Comprehensive Income/Losses3186-340-21871.1%-0.1%-0.8%

Total Equity1183041023308271839.3%35.7%32.0%

Total Equity and Liabiltiies

301311286556258848100.0%100.0%100.0%

MSFT_BalanceSheet_Annua Horizontal

202020192018202020192018

Cash, Cash Equivalents and Short Term Investments136527133819133768102.0%100.0%100.0%

Inventories18952063266291.9%77.5%100.0%

Trade and Other Receivables, Current320112952426481108.4%111.5%100.0%

Other Current Assets11482101466751113.2%150.3%100.0%

Total Current Assets181915175552169662103.6%103.5%100.0%

Deferred Costs/Assets, Current

Net Property, Plant and Equipment529044385636146120.6%121.3%100.0%

Net Intangible Assets503894977643736101.2%113.8%100.0%

Total Long Term Investments296526491862111.9%142.3%100.0%

Other Non-Current Assets1313814723744289.2%197.8%100.0%

Total Non-Current Assets11939611100489186107.6%124.5%100.0%

Total Assets301311286556258848105.1%110.7%100.0%

Financial Liabilities, Current37495516399868.0%138.0%100.0%

Provisions, Current787468306103115.3%111.9%100.0%

Deferred Liabilities, Current360003267628905110.2%113.0%100.0%

Other Current Liabilities1002793518744107.2%106.9%100.0%

Total Current Liabilities723106942058488104.2%118.7%100.0%

Long Term Debt59578666627224289.4%92.3%100.0%

Capital Lease Obligations, Non-Current767161885568124.0%111.1%100.0%

Tax Liabilities, Non-Current20423354187.6%43.1%100.0%

Deferred Income/Customer Advances/Billings in Excess of Cost, Non-Current31804530381570.2%118.7%100.0%

Payables and Accrued Expenses, Non-Current29432296123026599.4%97.8%100.0%

Other Non-Current Liabilities1063275815211140.2%145.5%100.0%

Total Non-Current Liabilities11069711480611764296.4%97.6%100.0%

Total Liabilities18300718422617613099.3%104.6%100.0%

Equity Attributable to Parent Stockholders11830410233082718115.6%123.7%100.0%

Paid in Capital805527852071223102.6%110.2%100.0%

Retained Earnings/Accumulated Deficit345662415013682143.1%176.5%100.0%

Reserves/Accumulated Comprehensive Income/Losses3186-340-2187-937.1%15.5%100.0%

Total Equity11830410233082718115.6%123.7%100.0%

Total Equity and Liabiltiies

301311286556258848105.1%110.7%100.0%

MSFT_Income Statement Verical

202020192018202020192018

Total Revenue143,015 125,843 110,360 100.0%100.0%100.0%

Cost of Revenue46,078 42,910 38,353 32.2%34.1%34.8%

Gross Profit96,937 82,933 72,007 67.8%65.9%65.2%

Selling, General and Administrative Expenses24,709 23,098 22,223 17.3%18.4%20.1%

Research and Development Expenses19,269 16,876 14,726 13.5%13.4%13.3%

Operating Income/Expenses43,978 39,974 36,949 30.8%31.8%33.5%

Total Operating Profit/Loss52,959 42,959 35,058 37.0%34.1%31.8%

Non-Operating Income/Expenses, Total77 729 1,416 0.1%0.6%1.3%

Pretax Income53,036 43,688 36,474 37.1%34.7%33.1%

Provision for Income Tax8,755 4,448 19,903 6.1%3.5%18.0%

Net Income from Continuing Operations44,281 39,240 16,571 31.0%31.2%15.0%

MSFT_IncomeStatement_Horizontal

202020192018202020192018

Total Revenue143,015 125,843 110,360 113.6%114.0%100.0%

Cost of Revenue46,078 42,910 38,353 107.4%111.9%100.0%

Gross Profit96,937 82,933 72,007 116.9%115.2%100.0%

Selling, General and Administrative Expenses24,709 23,098 22,223 107.0%103.9%100.0%

Research and Development Expenses19,269 16,876 14,726 114.2%114.6%100.0%

Operating Income/Expenses43,978 39,974 36,949 110.0%108.2%100.0%

Total Operating Profit/Loss52,959 42,959 35,058 123.3%122.5%100.0%

Non-Operating Income/Expenses, Total77 729 1,416 10.6%51.5%100.0%

Pretax Income53,036 43,688 36,474 121.4%119.8%100.0%

Provision for Income Tax8,755 4,448 19,903 196.8%22.3%100.0%

Net Income from Continuing Operations44,281 39,240 16,571 112.8%236.8%100.0%