Using the Microsoft Income Statement and Balance Sheets for the years 2020 and 2021, vertically analyze both

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Question:

Using the Microsoft Income Statement and Balance Sheets for the years 2020 and 2021, vertically analyze both years on both statements. Consider using Excel formulas to speed up your analysis! Remember to highlight numbers with significant changes in the Excel sheet (any form of highlight is fine, examples above). You will submit your Excel sheets with your vertical analyses on them as well as a WORD document explaining your findings.

Once you have completed both analyses, write (remember a maximum of 300 words) a brief explanation about any significant changes you discover (if any). Reasonable explanations with support or evidence about why you think the changes happened are encouraged.

Tip: Remember the Balance Sheets and Income Statements are real statements from the years 202 and 2021.

MICROSOFT CORPORATION

INCOME STATEMENTS
(In millions, except per share amounts) (Unaudited)



	2021	2020	2021	2020
Revenue:
Product	$16,631	$15,803	36.70%	42.53%
Service and other	28,686	21,351	63.30%	57.47%
Total revenue	45,317	37,154	100.00%	100.00%
Cost of revenue:
Product	3,792	3,597	8.37%	9.68%
Service and other	9,854	7,405	21.74%	19.93%
Total cost of revenue	13,646	11,002	30.11%	29.61%
Gross margin	31,671	26,152	69.89%	70.39%
Research and development	5,599	4,926	12.36%	13.26%
Sales and marketing	4,547	4,231	10.03%	11.39%
General and administrative	1,287	1,119	2.84%	3.01%
Operating income	20,238	15,876	44.66%	42.73%
Other income, net	286	248	0.63%	0.67%
Income before income taxes	20,524	16,124	45.29%	43.40%
Provision for income taxes	19	2,231	0.04%	6.00%
Net income	$20,505	$13,893	45.25%	37.39%
Earnings per share:
Basic	$2.73	$1.84
Diluted	$2.71	$1.82
Weighted average shares outstanding:
Basic	7,513	7,566
Diluted	7,567	7,637