Thursday, January 22, 2009

Reading Comprehension > Financial Statements

Read this (and come back).

Microsoft has been approaching the top of the corporate curve over the last decade. Meaning exponential growth slows. All businesses do this. Long-lasting ones adjust and reorganize, effectively starting at the bottom of the curve.

Enough of that, here's my point: MS had profits of $4 Billion and change. Four Billion. Not $4,000 nor $4,000,000. $4,000,000,000. Of profit- all expenses covered, salaries paid for, building leases paid, etc. (I'll assume it's EBIT, that is left out of the statement).

Revenues were up 2%. And consider they shipped a discouraging product in Vista and the massive push to web applications (which MS has none of), this is a good thing.

So why the panic? Why the layoffs? Because of the "power" of the dollar and Wall Street. Way to focus, guys.

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