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Write 4 page essay on the topic Microsoft Company.The company has made a significant impact on the state of the economy in the state of Washington. The company’ growth experiences have had an intens
Write 4 page essay on the topic Microsoft Company.
The company has made a significant impact on the state of the economy in the state of Washington. The company’ growth experiences have had an intense effect on the employment growth in Washington. For 18 years of the company’s existence, the growth rate of employment in Washington alone has expanded at an annual average rate of 1.7 %. Secondly, the company’s consumption rate of goods and other transactions has had a significant boost in the level of income in Washington (Eicher, 2010).
Industry analysis/ Benchmark – Microsoft Corporation is the leading producer of computer software. However, its products are facing a stiff competition from products such as Linux, UNIX and Macintosh. The company also faces a strong rivalry from various companies such as the American Software, Apple, Google, Autodesk Inc. and others. Fortunately, Microsoft’s products have unshaken competitive advantage over other companies for the reason that their products are user friendly thus has a stronger market share. For instance, an industry analysis between Microsoft and American software based on net income for two years, 2012 and 2013, shows that Microsoft had a higher net income as compared to its rival. That is, ($ 21,863,000 in 2013. $ 16,978,000 in 2012 for Microsoft) and ($ 10,411,000 in 2013. $ 11,343,000 in 2012 for American Software) (SEC filings, n.d.).
Holding period return – the company’s holding period returns as measured by the return on equity and return on investments are as follows: ROE (net income/Total equity), ROI (net profit/Total assets). In 2011, 2012 and 2013, the company’s ROE = (47.6 % in 2011. 27.69 % in 2013. 25.58 % in 2012). This single factor DuPont analysis shows the investors’ reward for the equity contribution. The return could be classified as sufficient and it increased in the year 2013. The ratio shows that the company is efficient. Secondly, the ROI = (25 % in 2011. 15.35 % in 2013. 14 % in 2013). Return on
