Microsoft Corporation

www.InvestingSidekick.com

MSFT

Value Report

I.S.Q. Score: 7/10

TTM EPS:
Next year EPS estimate:
Net cash* / (debt) p.s:
Net debt EBITDA:
Net debt Equity:

2.47
2.76
7.86
-

Op. profit p.s.

Jun

Sep

Dec

Mar

TTM

12M ending 2015

12M ending 2014
12M ending 2013
12M ending 2012
12M ending 2011

0.79
0.73
0.02
0.74
0.68

0.71
0.76
0.63
0.86
0.83

0.95
0.96
0.93
0.95
0.97

0.82
0.84
0.91
0.76
0.68

3.26
3.29
2.49
3.31
3.16

Operational Performance (Rolling 12 months)

Gross Margin**

SG&A %

R&D %

Net Debt / EBITDA**

Op Margin

90%

45%

80%

40%

ROE

ROIC
180%

1.2

160%

1.0
140%

35%

70%
60%

30%

50%

25%

120%

0.8

100%
0.6

40%

20%

30%

15%

20%

10%

80%

60%

0.4

40%
0.2

10%

5%

0%

0%

2009

$ millions

2010

2011

20%

0%

2012

2013

2014

TTM

Income Statement
Revenue

CAGR/average
5 year

10 year

58,437
21,677
20,363
14,569
1.64
14,569
0.52

62,484
26,994
24,098
18,760
2.16
18,760
0.52

69,943
30,232
27,161
23,150
2.76
23,150
0.64

73,723
24,814
21,763
16,978
2.03
23,171
0.80

77,849
30,559
26,764
21,863
2.63
21,863
0.92

86,833
32,746
27,759
22,074
2.68
22,227
1.12

94,782
32,916
26,696
20,000
2.47
22,133
1.21

8%
9%
6%
9%
10%
9%
17%

9%
12%
12%
10%
14%
11%
21%

25,701
39,558
25,296
2.84

30,849
46,175
32,623
3.76

40,851
57,083
43,758
5.22

51,096
66,363
49,741
5.93

61,422
78,944
61,206
7.35

63,064
89,784
62,676
7.61

63,570
90,132
61,441
7.60

20%
18%
20%
22%

0%
2%
-1%
2%

2,562
19,037
(3,119)
(868)

2,673
24,073
(1,977)
(245)

2,766
2,967
26,994
31,626
(2,355)
(2,305)
(71) (10,112)

3,755
28,833
(4,257)
(1,584)

5,212
32,231
(5,485)
(5,937)

6,206
31,778
(5,493)
-

15%
11%
12%
47%

16%
8%
11%
108%

15,918
8,908
70
22

22,096
8,668
76
22

24,639
8,376
78
32

29,321
8,381
78
24

24,576
8,328
82
35

26,746
8,239
82
36

26,285
8,090
48
27

11%
-2%
79
30

7%
-3%
77
34

Gross Margin

79.2%

80.2%

77.7%

76.2%

74.0%

69.0%

65.0%

75.4%

78.3%

Operating Margin

34.8%

38.6%

38.8%

29.5%

34.4%

32.0%

28.2%

34.7%

35.5%

EBITDA
Operating Profit
Net profit (continuing)
EPS (continuing)
Adjusted net income
Dividend per share

Balance Sheet
Net cash* / (debt)
Shareholders equity
Tangible book value
TBV per share

Cash Flow
Depreciation & amortization
Net cash from operations
Net Cap Ex
Net Disposals (acquisitions)

Other Information
Free cash flow
Shares outstanding (mil)
Accts Receivable days
Inventory days

Ratios

Adjusted Net Profit Margin

ROIC
Quick Ratio

24.9%

30.0%

33.1%

31.4%

28.1%

25.6%

23.4%

29.6%

28.9%

101.4%

119.0%

139.5%

109.1%

123.6%

81.8%

74.9%

114.6%

131.1%

2.3

2.0

1.6
Report updated on:

23-May-15

1.9

2.4

2.4

Share price at report date:

2.5
$47.31

2.3

2.6

Market Cap: $382,718m

*Net cash/debt is total debt offset by cash, cash equivalents and short term investments. **Plotted against Left hand axis
Investing Sidekick Ltd. All rights reserved. This report is for information purposes only and accuracy is not guaranteed. Certain financial information included in Investing Sidekick is proprietary to
Mergent, Inc. (Mergent) Copyright 2015. Reproduction of such information in any form is prohibited. Because of the possibility of human or mechanical error by Mergents sources, Mergent or
others, Mergent does not guarantee the accuracy, adequacy, completeness, timeliness or availability or for the results obtained from the use of such information.

Microsoft Corporation

www.InvestingSidekick.com

MSFT

Value Report

EV/OP trading range

Conservative model value

Aggressive model value

Current EV/OP (TTM)

Current EV/OP 12.0

(Enterprise Value / Operating Profit)

Return on Invested Capital

29.5

Free Cash ROIC

114.6%
142.0%

(5 year average)

24.5

Free Cash Flow Operating Profit

99%
15 years
94%
10 years
100%
5 years

19.5

% spending of FCF on

14.5

Net Acquisitions/(divestitures)
Dividends

9.5

Share buybacks / (issues)

Decrease/(increase) of net debt

4.5

Other spending/(asset sales)

14%
41%
57%
1%
(13%)

(cumulative last 10 years)

P/B trading range

P/B = 1

Book value p.s. 11.14

Current P/B

8.9

Average annual change in

Book Value p.s.
TBV p.s.
11.3%
9.4%
15 years
15 years
6.7%
4.4%
10 years
10 years
19.8%
22.5%
5 years
5 years

6.9
4.9

Compounded annual growth in

Book Value p.s.
TBV p.s.
7.6%
4.9%
15 years
15 years
10.3%
7.0%
10 years
10 years
19.6%
19.2%
5 years
5 years

0.9

Book Value per share

Quick Ratio (Acid test)

Accounts receivable days

35,000

12

30,000

10

25,000

20,000
6
15,000
4

10,000
5,000

Quick Ratio

Free Cash Flow

Tangible Book Value per share

Book Value per share ($)

Operating Income

Inventory days

350%

70.0

300%

60.0

250%

50.0

200%

40.0

150%

30.0

100%

20.0

50%

10.0

0%

0.0

Inventory/Accounts receivable days

2.9

Operating Profit / FCF ($mil)

7.60
3.94
7.86

Tangible Book (TBV) p.s.

Net Net Curr. Assets p.s.
Net cash* / (debt) p.s.

10.9

(Seasonally adjusted data)

Report updated on: 23-May-15

Share price at report date:

$47.31

Market Cap: $382,718m

*Net cash/debt is total debt offset by cash, cash equivalents and short term investments.
Investing Sidekick Ltd. All rights reserved. This report is for information purposes only and accuracy is not guaranteed. Certain financial information included in Investing Sidekick is proprietary to
Mergent, Inc. (Mergent) Copyright 2015. Reproduction of such information in any form is prohibited. Because of the possibility of human or mechanical error by Mergents sources, Mergent or
others, Mergent does not guarantee the accuracy, adequacy, completeness, timeliness or availability or for the results obtained from the use of such information.