Answer To: I want you to go to:https://www.investing.com/equities/microsoft-corp-financial-summary and replace...
Siddharth answered on May 05 2021
Free Cash Flow
MICROSOFT CORPORATION
Balance Sheet (amounts in millions)
As of Dec. 31, 2018 and 2019
2018 2019 Δ 2018 2019 Δ
Cash $133,650 $133,819 $169 Acc. Pay. $8,617 $9,382 $765
Acc. Rec. 26,481 29,524 3,043 Notes Pay. 0 0 0
Inventory 2,662 2,063 (599) Current Liab. $58,488 $69,420 $765
Current Assets $162,793 $165,406 $2,613 Long-term Debt $184,226 $176,130 ($8,096)
Total Debt $242,714 $245,550 ($7,331)
Net Fixed Assets $258,848 $286,556 $27,708
Total Equity $178,927 $206,412 $37,652
Total Assets $421,641 $451,962 $30,321 Total D&E $421,641 $451,962 $30,321
MICROSOFT CORPORATION
Income Statement (amounts in millions) Free Cash Flow Calculation:
For the period ended Dec. 31, 2008 and 2009
2018 2019 Δ 1. Operating Cash Flow for 2019
$44,279
Sales $110,360 $125,843 $15,483
COGS 38,353 42,910 4,557 2. Capital Spending for 2019
Gross Profit $72,007 $82,933 $10,926 $39,390
Selling & Adm. Exp. 22,223 23,098 875
EBITDA $49,784 $59,835 $10,051 3. Change in Net Working Capital for 2019
Depreciation Exp. 10,261 11,682 1,421 ($8,319)
EBIT $39,523 $48,153 $8,630
Interest Expenses 2,400 2,400 0 4. Cash Flow from Assets for 2019
EBT $37,123 $45,753 $8,630 $13,208
Taxes (34% of EBT) 12,622 15,556 2,934
Net Income $24,501 $30,197 $5,696 5. Cash Flow to Creditors for 2019
$10,496
Div. Payout ratio 78.0% 36.0% -42.0%
6. Cash Flow to Stockholders for 2019
Dividends $19,111 $10,871 ($8,240) ($7,455)
Additions to RE $5,390 $19,326 $13,936
7. Cash Flow to Creditors and Stockholders for 2019
$3,041
2019
Operating Cash Flow $44,279
Richard: Operating Cash Flow = EBIT + Depr - Taxes
Capital Spending 39,390
Richard: Capital Spending = END(Net Fixed Assets) - BEG(Net Fixed Assets) + Depreciation exp.
CH. NWC (8,319)
Richard: Change in NWC = END(NWC) - BEG(NWC)
NWC = Net Working Capital = Current Assets - Current Liabilities
Cash Flow From Assets $13,208
Richard: Cash Flow from Assets should be equal to Cash Flow to Creditors and Cash Flow to Stockholders
Cash Flow to Creditors $10,496
Richard: CC = Interest paid - Net New Borrowing + Long-term Debt Redemption
Cash Flow to Stockholders (7,455)
Richard: CS = Dividends Paid - Net New Equity Raised + CS Buyback
CC + CS $3,041
Richard: Cash Flow to Creditors and Cash Flow to Stockholders should be equal to Cash Flow from Assets
Richard: Operating Cash Flow = EBIT + Depr - Taxes
Statement of Cash Flow
MICROSOFT CORPORATION
Balance Sheet (amounts in millions)
As of Dec. 31, 2018 and 2019
2018 2019 Δ 2018 2019 Δ
Cash $133,650 $133,819 $169 Acc. Pay. $8,617 $9,382 $765
Acc. Rec. 26,481 29,524 3,043 Notes Pay. 0 0 0
Inventory 2,662 2,063 (599) Current Liab. $58,488 $69,420 $765
Current Assets $162,793 $165,406 $2,613 Long-term Debt $84,226 $176,130 $91,904
Total Debt $142,714 $245,550 $92,669
Net Fixed Assets $258,848 $286,556 $27,708
Total Equity $278,927 $206,412 ($62,348)
Total Assets $421,641 $451,962 $30,321 Total D&E $421,641 $451,962 $30,321
MICROSOFT CORPORATION
Income Statement (amounts in millions) Statement of Cash Flow Calculation:
For the period ended Dec. 31, 2018 and 2019
2018 2019 Δ 1. Cash Flow from Operating activities for 2019:
Sales $110,360 $125,843 $15,483 Net Income $30,197
COGS 38,353 42,910 4,557 Add: Depreciation 11,682
Gross Profit $72,007 $82,933 $10,926 Add: Decrease in Inventory 599
Selling & Adm. Exp. 22,223 23,098 875 Add: Increase in A/P 765
EBITDA $49,784 $59,835 $10,051 Less: Increase in A/R (3,043)
Depreciation Exp. 10,261 11,682 1,421 Cash Flow from Operating activities $40,200
EBIT $39,523 $48,153 $8,630
Interest Expenses 2,400 2,400 0 2. Cash Flow from Investing activities for 2019:
EBT $37,123 $45,753 $8,630 Add: Decrease in NFA ($27,708) NET CAPITAL SPENDING = IN ΔNFA+DEPRECIATION
Taxes (34% of EBT) 12,622 15,556 2,934 Less: Depreciation (11,682)
Net Income $24,501 $30,197 $5,696 Cash Flow from Investing activities ($39,390)
Div. Payout ratio 78.0% 36.0% -42.0% 3. Cash Flow from Financing activities for 2019:
Retention rate 22.00% 64.00% Less: Decrease in N/P $0
Dividends $19,111 $10,871 Add: Increase in LTD 91,904
Additions to RE $5,390 $19,326 Less: decrease in CS (shares bought back) (81,674)
Less: Dividends paid (10,871)
Cash Flow from Financing activities ($641)
Total Cash Flow Change $169
beginning balance of cash $133,650
Δ in cash $169
Ending balance of cash $133,819
Common-Sized FS
MICROSOFT CORPORATION
Balance Sheet (amounts in millions)
As of Dec. 31, 2018 and 2019
2018 CS 2018 2019 CS 2019 2018 CS 2018 2019 CS 2019
Cash $133,650 31.7% $133,819 29.6% Acc. Pay. $8,617 2.0% $9,382 2.1%
Acc. Rec. 26,481 6.3% 29,524 6.5% Notes Pay. 0 0.0% 0 0.0%
Inventory 2,662 0.6% 2,063 0.5% Current Liab. $58,488 13.9% $69,420 15.4%
Current Assets $162,793 38.6% $165,406 36.6% Long-term Debt $184,226 43.7% $176,130 39.0%
Total Debt $242,714 57.6% $245,550 54.3%
Net Fixed Assets $258,848 61.4% $286,556 63.4%
Total Equity $178,927 42.4% $206,412 45.7%
Total Assets $421,641 100.0% $451,962 100.0% Total D&E $421,641 100.0% $451,962 100.0%
MICROSOFT CORPORATION Common Size
Income Statement (amounts in millions) For the balance sheet , you divide each account by total assets
For the period ended Dec. 31, 2018 and 2019 for each year; for the income statement, each account is divided
by total sales.
2018 CS 2018 2019 CS 2019 The common size analysis converts numbers into % in order to
compare more easily financial reports. It gives a figure about
Sales $110,360 100.0% $125,843 100.0% how total assets are allocated among...