To evaluate YoY business performance, the Leadership team of Microsoft Corporation has defined the following financial metrics:

• Revenue (product vs. services)
• Gross margin
• EBITDA
• Net Debt

Calculated these metrics for years 2018, 2019 and 2020, review the YoY trends and evaluate the overall business performance.

Formulas:

Gross margin = (Total Revenue) - (Total Cost of Revenue)

Operating margin = (Total Revenue) - (Total Cost of Revenue + Research and Development + Sales and Marketing + General and Administrative)

EBITDA = (Net Income) - (Provision for Income Taxes)

Net Debt = (Current portion of long-term debt + Long-term debt) - (Cash and cash equivalent)

Answer rating: 100% (QA)

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