-0.23 | -0.66%
MICROSOFT CORP's gross profit margin for the third quarter of its fiscal year 2013 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. MICROSOFT CORP is extremely liquid. Currently, the Quick Ratio is 2.71 which clearly shows the ability to cover any short-term cash needs. MSFT managed to increase the liquidity from the same period a year ago, despite already having very strong liquidity to begin with. This would indicate improved cash flow.
During the same period, stockholders' equity ("net worth") has increased by 11.69% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.
| Income Statement | Q3 FY13 | Q3 FY12 |
|---|---|---|
| Net Sales ($mil) | 20489.0 | 17407.0 |
| EBITDA ($mil) | 8665.0 | 7140.0 |
| EBIT ($mil) | 7612.0 | 6374.0 |
| Net Income ($mil) | 6055.0 | 5108.0 |
| Balance Sheet | Q3 FY13 | Q3 FY12 |
|---|---|---|
| Cash & Equiv. ($mil) | 74483.0 | 59529.0 |
| Total Assets ($mil) | 134105.0 | 118010.0 |
| Total Debt ($mil) | 14195.0 | 11938.0 |
| Equity ($mil) | 76688.0 | 68659.0 |
| Profitability | Q3 FY13 | Q3 FY12 |
|---|---|---|
| Gross Profit Margin | 81.78 | 81.7 |
| EBITDA Margin | 42.29 | 41.01 |
| Operating Margin | 37.15 | 36.62 |
| Sales Turnover | 0.57 | 0.62 |
| Return on Assets | 12.23 | 19.78 |
| Return on Equity | 21.39 | 33.99 |
| Debt | Q3 FY13 | Q3 FY12 |
|---|---|---|
| Current Ratio | 2.93 | 2.94 |
| Debt/Capital | 0.16 | 0.15 |
| Interest Expense | 109.0 | 95.0 |
| Interest Coverage | 69.83 | 67.09 |
| Share Data | Q3 FY13 | Q3 FY12 |
|---|---|---|
| Shares outstanding (mil) | 8349.0 | 8400.0 |
| Div / share | 0.23 | 0.2 |
| EPS | 0.72 | 0.6 |
| Book value / share | 9.19 | 8.17 |
| Institutional Own % | n/a | n/a |
| Avg Daily Volume | 5.1674744E7 | 5.0681128E7 |
BUY. The current P/E ratio indicates a significant discount compared to an average of 27.69 for the Software industry and a value on par with the S&P 500 average of 19.08. Conducting a second comparison, its price-to-book ratio of 3.71 indicates a premium versus the S&P 500 average of 2.44 and a significant discount versus the industry average of 7.07. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. Upon assessment of these and other key valuation criteria, MICROSOFT CORP proves to trade at a discount to investment alternatives within the industry.
| Price/Earnings |
|
Price/Cash Flow |
| |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| MSFT 17.48 | Peers 27.69 | MSFT 9.29 | Peers 20.11 | |||||||||||||||||||||
|
Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations. MSFT is trading at a significant discount to its peers. |
Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures. MSFT is trading at a significant discount to its peers. |
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| Price/Projected Earnings |
|
Price to Earnings/Growth |
|
|||||||||||||||||||||
| MSFT 11.16 | Peers 24.71 | MSFT 0.46 | Peers 0.76 | |||||||||||||||||||||
|
Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations. MSFT is trading at a significant discount to its peers. |
Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples. MSFT trades at a significant discount to its peers. |
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| Price/Book |
|
Earnings Growth |
|
|||||||||||||||||||||
| MSFT 3.71 | Peers 7.07 | MSFT -29.10 | Peers -92.79 | |||||||||||||||||||||
|
Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet. MSFT is trading at a significant discount to its peers. |
Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios. MSFT is expected to have an earnings growth rate that significantly exceeds its peers. |
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| Price/Sales |
|
Sales Growth |
|
|||||||||||||||||||||
| MSFT 3.74 | Peers 8.67 | MSFT 4.08 | Peers 16.46 | |||||||||||||||||||||
|
Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales. MSFT is trading at a significant discount to its industry on this measurement. |
Lower. A sales growth rate that trails the industry implies that a company is losing market share. MSFT significantly trails its peers on the basis of sales growth |
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