Microsoft Corp

(MSFT)
Company Overview
Microsoft Corporation is engaged in developing, licensing and supporting a range of software products and services. The Company also designs and sells hardware, and delivers online advertising to the customers. It operates in five segments: Windows & Windows Live Division (Windows Division), Server and Tools, Online Services Division (OSD), Microsoft Business Division (MBD), and Entertainment and Devices Division (EDD). The Company s products include operating systems for personal computers (PCs), servers, phones, and other intelligent devices; server applications for distributed computing environments; productivity applications; business solution applications; desktop and server management tools; software development tools; video games, and online advertising. It also designs and sells hardware, including the Xbox 360 gaming and entertainment console and Xbox 360 accessories. Its cloudbased computing services include Bing and Windows Live Essentials suite. Low Risk 5 4 3 2 1 0 Good Financial Health February 2, 2012 Figures in Millions except per share values

Strong Moat

High Growth

Under Valued

Valuation
Current Price NCAV Total Net Reprod. Cost Earnings Power Value (EPV) Discounted Cash Flow (DCF) Ben Graham Formula $ $ $ $ $ $ 24.72 2.78 7.23 32.41 42.77 67.24

Well Managed

Margin of Safety
-89% -71%

5 Yr Price vs Intrinsic Value

45 40
31% 73% 172%

35 30 25 20

Key Statistics
Mkt Cap ($M) 52 Wk High 52 Wk Low % off 52Wk Low $ 207,110.00 $ 29.46 $ 23.32 6.0%

Valuation Ratios
P/E(TTM) P/S(TTM) P/Tang BV(MRQ) FCF/EV (TTM) P/FCF(TTM) Earnings Yld (TTM) Piotroski (TTM) Altman (MRQ) Beneish (TTM) 9.2 3.0 4.7 9.3% 10.6 18.0% 4 3.18 -2.65

15 10 5 0 0/1/1900
Historical Price Intrinsic Value Buy Price

Cash Flows
Free Cash Flow 5 yr FCF Growth 10 yr FCF Growth 12.2% 5.8%

Balance Sheet
Cash and Equiv $ 52,772.00 Short-Term Investments Accts Rec Inventory Total Current Assets Net PP&E Intangibles Total Assets Total Current Liabilities Long-Term Debt Total Liabilities $ $ 14,987.00 $ 1,372.00 $ 77,385.00 $ 8,162.00 $ 13,325.00 $ 111,171.00 $ $ $ 28,774.00 11,921.00 51,621.00

Effectiveness
CROIC Avg FCF/S Avg ROA Avg ROE Avg

Margins & Profitability

36.8% 30.4% 21.8% 40.6% Gross Gross Margin Operating Operating Margin Net Profit Net Margin

Financial Strength (MRQ) Efficiency

Rec Turnover(TTM) Inv Turnover(TTM) Asset Turnover(TTM) 5.0 14.8 0.7 Quick Ratio(MRQ) Current Ratio(MRQ) LTD/Eq(MRQ) Tot D/Eq(MRQ) 2.6 2.6 20.9 20.9