2. The Story is in the Statements Prof. Susan M. Sorensen, Ph.D., CPA University of Houston Clear Lake © Susan M. Sorensen - Do not duplicate without permission

3. Microsoft – Balance Sheet Retained Earnings... (18,901) (12,298)

4. Financial Statement Contents Auditor’s Opinion Auditor’s Opinion Balance Sheet – Balance Sheet – Statement of Financial Position Statement of Financial Position Income Statement – Income Statement – Statement of Activities Statement of Activities Statement of Shareholder’s Equity Statement of Shareholder’s Equity Cash Flow Statement Cash Flow Statement Notes Notes Wording in titles will vary. Many will say Consolidated...

5. Microsoft – Income Statement Net Income... $12,599 $12,254

6. Microsoft – Equity Statement Common stock cash dividends... (3,594) (36,968) Common stock repurchased... (15,411) (6,320)

7. Finding the Story in the Financial Statements Use the power of the internet http://www.microsoft.com/msft/reports/ar0 7/downloads/MS_2007_10K.doc Note the file is a word document that can be searched.

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