Sunday, September 8, 2019
Microsoft Company Essay Example | Topics and Well Written Essays - 1000 words
Microsoft Company - Essay Example The company has made a significant impact on the state of the economy in the state of Washington. The companyââ¬â¢ growth experiences have had an intense effect on the employment growth in Washington. For 18 years of the companyââ¬â¢s existence, the growth rate of employment in Washington alone has expanded at an annual average rate of 1.7 %. Secondly, the companyââ¬â¢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 ââ¬â 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, Microsoftââ¬â¢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 ââ¬â the companyââ¬â¢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 companyââ¬â¢s ROE = (47.6 % in 2011; 27.69 % in 2013; 25.58 % in 2012). This single factor DuPont analysis shows the investorsââ¬â¢ 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
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