Doing a Comparative analysis over the past three years, Goldman Sachs versus Morgan Stanley, Please show all work, Which company has superior qualitative and quantitative accounting metrics, why What non accounting factors influence your prediction and decision Why MORGAN STANLEY BALANCE SHEET Fiscal year ends in December USD in millions except per share data 2014 2015 2016 Assets Cash and cash equivalents 87591 54083 43381 Restricted cash and cash equivalents 31469 Federal funds sold 83288 87657 101955 Securities and investments 351788 315690 342246 Securities borrowed 136708 142416 125236 Receivables 48961 45407 46460 Loans 66577 85759 94248 Premises and equipment 6108 6373 Goodwill 6588 6584 6577 Intangible assets 3159 2984 2721 Other assets 10742 9043 52125 Total assets 801510 787465 814949 Liabilities and stockholders' equity Liabilities Deposits 133544 156034 155863 Federal funds purchased 69949 36692 54628 Payables 181069 186626 190513 Trading liabilities 107381 109139 Short term borrowing 2261 2173 941 Long term debt 164857 163232 175893 Accrued expenses and liabilities Other liabilities 71549 58387 161061 Total liabilities 730610 712283 738899 Stockholders' equity Preferred stock 6020 7520 7520 Common stock 20 20 20 Other Equity 2127 2409 2851 Additional paid in capital 24249 24153 23271 Retained earnings 44625 49204 53679 Treasury stock 2766 4059 5797 Accumulated other comprehensive income 3375 4065 5494 Total Stockholders' equity 70900 75182 76050 Total liabilities and stockholders' equity 801510 787465 814949 Income Statement MORGAN STANLEY INCOME STATEMENT Fiscal year ends in December USD in millions except per share data 2014 2015 2016 Revenues Investment banking 5948 5594 4933 Asset mgmt and securities services 10570 10766 10697 Interest income 5413 5835 7016 Other income 16022 15702 15303 Total interest and dividend income 37953 37897 37949 Interest expense 3678 2742 3318 Revenues, net of interest expense 34275 35155 34631 Operating expenses Compensation and benefits 17824 16016 15878 Tech, communication and equipment 1635 1767 1787 Professional and outside services 2117 2298 2128 Advertising and marketing 658 681 587 Other special charges 5211 2624 2175 Other expenses 3239 3274 3228 Total noninterest expense 30684 26660 25783 Income before income taxes 3591 8495 8848 Income taxes 90 2200 2726 Other income (expense) 200 152 144 Income from discontinued operations 14 16 1 Net income 3467 6127 5979 Preferred dividends 315 456 471 Net income available to common shareholders 3152 5671 5508 Earnings per share Basic 1 64 2 97 2 98 Diluted 1 6 2 9 2 92 Weighted average shares outstanding Basic 1924 1909 1849 Diluted 1971 1953 1887 Cash Flow Fiscal year ends in December USD in millions except per share data 2014 12 2015 12 2016 12 Cash Flows From Operating Activities Net income 3667 6279 6123 Depreciation amortization 1161 1433 1736 Investment asset impairment charges 111 69 130 Deferred tax (benefit) expense 231 1189 1579 Investments (gains) losses 40 84 112 (Gains) loss on disposition of businesses Stock based compensation 1260 1104 1136 Receivable 3608 434 2881 Payables 27971 4373 1803 Other assets and liabilities 36171 10586 7091 Other operating activities 205 331 24 Net cash provided by operating activities 1131 3674 2447 Cash Flows From Investing Activities Sales maturity of investments 17631 43589 42083 Purchases of investments 32623 47291 50911 Changes in loans, net 20116 15816 9604 Acquisitions and dispositions 989 998 Property, and equipments, net 992 1373 1276 Other investing activities 213 102 200 Net cash used for investing activities 35324 19995 19508 Cash Flows From Financing Activities Change in deposits 21165 22490 171 Change in short term borrowing 119 88 1206 Long term debt issued 36740 34182 43626 Long term debt repayment 33103 27289 30390 Preferred stock issued 1493 Repurchases of treasury stock 1458 2773 3933 Cash dividends paid 904 1455 1746 Other financing activities 584 2195 1244 Net cash provided by (used for) financing activities 23143 24365 7424 Effect of exchange rate changes 1849 945 1065 Net change in cash 12899 7099 10702 Cash at beginning of period 59883 46984 54083 Cash at end of period 46984 54083 43381 Balance Sheet GOLDMAN SACHS BALANCE SHEET Fiscal year ends in December USD in millions except per share data 2014 2015 2016 Assets Cash and cash equivalents 9 23 5 Receivables 9 13 12 Investments 944 1091 1167 Other assets 6 6 7 Total assets 967 1133 1191 Liabilities and stockholders' equity Liabilities Payables and accrued expenses 42 25 27 Long term debt 350 419 498 Other liabilities 1 0 Total liabilities 393 444 525 Stockholders' equity Common stock 0 0 0 Additional paid in capital 588 720 720 Accumulated other comprehensive income 13 31 55 Total stockholders' equity 575 689 665 Total liabilities and stockholders' equity 967 1133 1191 Income Statement GOLDMAN SACHS INCOME STATEMENT Fiscal year ends in December USD in millions except per share data 2014 2015 2016 Revenue 69 108 111 Operating expenses Nonrecurring expense 1 Other expenses 1 Total operating expenses Operating income 69 108 111 Nonoperating income Interest expense 5 11 14 Other income (expense) 11 17 21 Total nonoperating income, net 16 28 36 Income before taxes 53 80 75 Provision for income taxes 1 Other income (expense) 16 33 34 Net income 37 47 41 Net income available to common shareholders 37 47 41 Earnings per share Basic 1 04 1 34 1 12 Diluted 1 04 1 34 1 12 Weighted average shares outstanding Basic 35 35 36 Diluted 35 35 36 Cash Flow GOLDMAN SACHS CASH FLOW Fiscal year ends in December USD in millions except per share data 2014 12 2015 12 2016 12 Cash Flows From Operating Activities Net income 37 47 41 Amortization of debt discount premium and issuance costs 2 4 4 Investments (gains) losses 265 171 83 Receivable 5 4 1 Accrued liabilities 1 1 0 Interest payable 0 0 1 Other operating activities 577 9 12 Net cash provided by operating activities 280 121 31 Cash Flows From Investing Activities Cash Flows From Financing Activities Debt issued 450 288 387 Debt repayment 100 219 303 Common stock issued 135 Repurchases of treasury stock 24 1 Dividend paid 42 64 65 Other financing activities 3 4 6 Net cash provided by (used for) financing activities 281 136 13 Net change in cash 1 14 18 Cash at beginning of period 7 9 23 Cash at end of period 9 23 5 Free Cash Flow Operating cash flow 280 121 31 Free cash flow 280 121 31

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Question: Doing a Comparative analysis over the past three years, Goldman Sachs versus Morgan Stanley, Please show all work, Which company has superior qualitative and quantitative

Doing a Comparative analysis over the past three years, Goldman Sachs versus Morgan Stanley, Please show all work, Which company has superior qualitative and quantitative accounting metrics, why? What non-accounting factors influence your prediction and decision? Why?

MORGAN STANLEY BALANCE SHEET
Fiscal year ends in December. USD in millions except per share data.	2014	2015	2016
Assets
Cash and cash equivalents	87591	54083	43381
Restricted cash and cash equivalents		31469
Federal funds sold	83288	87657	101955
Securities and investments	351788	315690	342246
Securities borrowed	136708	142416	125236
Receivables	48961	45407	46460
Loans	66577	85759	94248
Premises and equipment	6108	6373
Goodwill	6588	6584	6577
Intangible assets	3159	2984	2721
Other assets	10742	9043	52125
Total assets	801510	787465	814949
Liabilities and stockholders' equity
*Liabilities*
Deposits	133544	156034	155863
Federal funds purchased	69949	36692	54628
Payables	181069	186626	190513
Trading liabilities	107381	109139
Short-term borrowing	2261	2173	941
Long-term debt	164857	163232	175893
Accrued expenses and liabilities
Other liabilities	71549	58387	161061
Total liabilities	730610	712283	738899
Stockholders' equity
Preferred stock	6020	7520	7520
Common stock	20	20	20
Other Equity	2127	2409	2851
Additional paid-in capital	24249	24153	23271
Retained earnings	44625	49204	53679
Treasury stock	-2766	-4059	-5797
Accumulated other comprehensive income	-3375	-4065	-5494
Total Stockholders' equity	70900	75182	76050
Total liabilities and stockholders' equity	801510	787465	814949

Income Statement

MORGAN STANLEY INCOME STATEMENT
Fiscal year ends in December. USD in millions except per share data.	2014	2015	2016
Revenues
Investment banking	5948	5594	4933
Asset mgmt and securities services	10570	10766	10697
Interest income	5413	5835	7016
Other income	16022	15702	15303
Total interest and dividend income	37953	37897	37949
Interest expense	3678	2742	3318
Revenues, net of interest expense	34275	35155	34631
Operating expenses
Compensation and benefits	17824	16016	15878
Tech, communication and equipment	1635	1767	1787
Professional and outside services	2117	2298	2128
Advertising and marketing	658	681	587
Other special charges	5211	2624	2175
Other expenses	3239	3274	3228
Total noninterest expense	30684	26660	25783
Income before income taxes	3591	8495	8848
Income taxes	-90	2200	2726
Other income (expense)	-200	-152	-144
Income from discontinued operations	-14	-16	1
Net income	3467	6127	5979
Preferred dividends	315	456	471
Net income available to common shareholders	3152	5671	5508
Earnings per share
Basic	1.64	2.97	2.98
Diluted	1.6	2.9	2.92
Weighted average shares outstanding
Basic	1924	1909	1849
Diluted	1971	1953	1887

Cash Flow


Fiscal year ends in December. USD in millions except per share data.	2014-12	2015-12	2016-12
Cash Flows From Operating Activities
Net income	3667	6279	6123
Depreciation & amortization	1161	1433	1736
Investment/asset impairment charges	111	69	130
Deferred tax (benefit) expense	-231	1189	1579
Investments (gains) losses	-40	-84	-112
(Gains) loss on disposition of businesses
Stock based compensation	1260	1104	1136
Receivable	3608	-434	-2881
Payables	27971	4373	1803
Other assets and liabilities	-36171	-10586	-7091
Other operating activities	-205	331	24
Net cash provided by operating activities	1131	3674	2447
Cash Flows From Investing Activities
Sales/maturity of investments	17631	43589	42083
Purchases of investments	-32623	-47291	-50911
Changes in loans, net	-20116	-15816	-9604
Acquisitions and dispositions	989	998
Property, and equipments, net	-992	-1373	-1276
Other investing activities	-213	-102	200
Net cash used for investing activities	-35324	-19995	-19508
Cash Flows From Financing Activities
Change in deposits	21165	22490	-171
Change in short-term borrowing	119	-88	-1206
Long-term debt issued	36740	34182	43626
Long-term debt repayment	-33103	-27289	-30390
Preferred stock issued		1493
Repurchases of treasury stock	-1458	-2773	-3933
Cash dividends paid	-904	-1455	-1746
Other financing activities	584	-2195	1244
Net cash provided by (used for) financing activities	23143	24365	7424
Effect of exchange rate changes	-1849	-945	-1065
Net change in cash	-12899	7099	-10702
Cash at beginning of period	59883	46984	54083
Cash at end of period	46984	54083	43381

Balance Sheet

GOLDMAN SACHS BALANCE SHEET
Fiscal year ends in December. USD in millions except per share data.	2014	2015	2016
Assets
Cash and cash equivalents	9	23	5
Receivables	9	13	12
Investments	944	1091	1167
Other assets	6	6	7
Total assets	967	1133	1191
Liabilities and stockholders' equity
Liabilities
Payables and accrued expenses	42	25	27
Long-term debt	350	419	498
Other liabilities	1	0
Total liabilities	393	444	525
Stockholders' equity
Common stock	0	0	0
Additional paid-in capital	588	720	720
Accumulated other comprehensive income	-13	-31	-55
Total stockholders' equity	575	689	665
Total liabilities and stockholders' equity	967	1133	1191

Income Statement

GOLDMAN SACHS INCOME STATEMENT
Fiscal year ends in December. USD in millions except per share data.	2014	2015	2016
Revenue	69	108	111
Operating expenses
Nonrecurring expense		1
Other expenses		-1
Total operating expenses
Operating income	69	108	111
Nonoperating income
Interest expense	5	11	14
Other income (expense)	-11	-17	-21
Total nonoperating income, net	-16	-28	-36
Income before taxes	53	80	75
Provision for income taxes			1
Other income (expense)	-16	-33	-34
Net income	37	47	41
Net income available to common shareholders	37	47	41
Earnings per share
Basic	1.04	1.34	1.12
Diluted	1.04	1.34	1.12
Weighted average shares outstanding
Basic	35	35	36
Diluted	35	35	36

Cash Flow

GOLDMAN SACHS CASH FLOW
Fiscal year ends in December. USD in millions except per share data.	2014-12	2015-12	2016-12
Cash Flows From Operating Activities
Net income	37	47	41
Amortization of debt discount/premium and issuance costs	-2	-4	-4
Investments (gains) losses	265	-171	-83
Receivable	-5	-4	1
Accrued liabilities	1	1	0
Interest payable	0	0	1
Other operating activities	-577	9	12
Net cash provided by operating activities	-280	-121	-31
Cash Flows From Investing Activities
Cash Flows From Financing Activities
Debt issued	450	288	387
Debt repayment	-100	-219	-303
Common stock issued		135
Repurchases of treasury stock	-24	-1
Dividend paid	-42	-64	-65
Other financing activities	-3	-4	-6
Net cash provided by (used for) financing activities	281	136	13
Net change in cash	1	14	-18
Cash at beginning of period	7	9	23
Cash at end of period	9	23	5
Free Cash Flow
Operating cash flow	-280	-121	-31
Free cash flow	-280	-121	-31

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