Business

Numbers Afficionado · Guest

I have included the latest balance statement for MSFT below. The
market capitalization of MSFT is now $296B. Their debt/equity (Dt/Eq)
ratio is 0.00.

Suppose that MSFT issued $295B in bonds. Also, suppose that they
started buying back all their shares - except $1B.

How would this alter their financial statements? Would this make the
financial statements weaker or stronger?

I realize that the company would be much bigger, based on assets,
since they have a huge liability. The equity would get reduced from
$35B to $1B or so.

In Millions of USD (except for per share items) As of 2007-03-31
Cash & Equivalents 7,611.00
Short Term Investments 20,625.00
Cash and Short Term Investments 28,236.00
Accounts Receivable - Trade, Net 8,454.00
Receivables - Other -
Total Receivables, Net 8,454.00
Total Inventory 1,750.00
Prepaid Expenses -
Other Current Assets, Total 4,343.00
Total Current Assets 42,783.00

Property/Plant/Equipment, Total - Gross -
Goodwill, Net 4,217.00
Intangibles, Net 699.00
Long Term Investments 9,624.00
Other Long Term Assets, Total 2,645.00
Total Assets 63,891.00

Accounts Payable 2,843.00
Accrued Expenses 1,878.00
Notes Payable/Short Term Debt 0.00
Current Port. of LT Debt/Capital Leases -
Other Current liabilities, Total 16,906.00
Total Current Liabilities 21,627.00

Long Term Debt -
Capital Lease Obligations -
Total Long Term Debt 0.00

Total Debt 0.00

Deferred Income Tax -
Minority Interest -
Other Liabilities, Total 7,291.00
Total Liabilities 28,918.00

Redeemable Preferred Stock, Total -
Preferred Stock - Non Redeemable, Net -
Common Stock, Total 60,827.00
Additional Paid-In Capital -
Retained Earnings (Accumulated Deficit) -25,854.00
Treasury Stock - Common -
Other Equity, Total -
Total Equity 34,973.00

Total Liabilities & Shareholders' Equity 63,891.00

Shares Outs - Common Stock Primary Issue -
Total Common Shares Outstanding 9,572.00