The following financial highlights were drawn from the 2009 annual reports of Microsoft Corporation and Apple Inc.

Even so, as of May 26, 2010, Wall Street valued Microsoft at $219.19 billion and Apple at $222.12. Divide the class into groups of four or five students.

Required
Have the members of each group reach a consensus response for each of the following tasks. Each group should elect a spokes person to represent the group.
Group Tasks
(1) Determine the amount of expenses incurred by each company.
(2) Comment on how the concept of conservatism applies to the financial information presented in this case.
(3) Speculate as to why investors would be willing to pay more for Apple than Microsoft.
Class Discussion
Randomly call on the spokes persons to compare their responses for each of the grouptasks.

Transcribed Image Text:

Microsoft Apple Revenue Net income $58.4 Billion $42.9 Billion $14.6 Billion 5.7 Billion Cash and short-term investments $39.7 Billion 23.1 Billion