Microsoft/Intuit Case Study

In: Business and Management

Submitted By danielyao
Words 1432
Pages 6
Microsoft/Intuit Case Study

Team 7

Garric Zhang
Ling Liao
Eric Wang

1. What factors have contributed to Microsoft’s large cash hoard? | 1985 | 1986 | 1987 | 1988 | 1989 | Cash and Marketable Securities | 18.9 | 102.7 | 132.5 | 183.2 | 300.8 | Stockholders' Equity | 54.5 | 139.3 | 239.1 | 375.5 | 561.7 | Net Profit | 24.1 | 39.3 | 71.8 | 123.9 | 170.5 | ROE | 44.22% | 28.21% | 30.03% | 33.00% | 30.35% | New Cash and Marketable Securities | 2.8 | 4.1 | 9.3 | 18.6 | 25.2 | New Stockholders' Equity | 38.4 | 40.7 | 115.9 | 210.9 | 286.1 | New Net Profit | 23.5 | 37.4 | 67.5 | 118 | 157.7 | ROE (after adjusted) | 61.20% | 91.89% | 58.24% | 55.95% | 55.12% | Increased ratio | 38.39% | 225.71% | 93.94% | 69.57% | 81.59% | | 1990 | 1991 | 1992 | 1993 | 1994 | Cash and Marketable Securities | 449 | 686 | 1345 | 2290 | 3614 | Stockholders' Equity | 919 | 1351 | 2193 | 3242 | 4450 | Net Profit | 279 | 463 | 708 | 953 | 1146 | ROE | 30.36% | 34.27% | 32.28% | 29.40% | 25.75% | New Cash and Marketable Securities | 39 | 57 | 78 | 91 | 105 | New Stockholders' Equity | 509 | 722 | 926 | 1043 | 941 | New Net Profit | 256 | 434 | 669 | 897 | 1077 | ROE (after adjusted) | 50.29% | 60.11% | 72.25% | 86.00% | 114.45% | Increased ratio | 65.67% | 75.40% | 123.78% | 192.57% | 344.43% |

From the case, we can know that Microsoft outsold its nearest competitor several time to be the most profitable large public corporation in the world, and dominated two critical segments of the personal computer market, operating system and applications software.
From the charts, we can find that when we take the excess cash and marketable securities out, the adjusted ROE decrease a lot. In 1985, the decreased ratio is 48.36%, while in 1994, the ratio is 322.67%, which means that in 1994, Microsoft had a huge excess cash and marketable…...

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