Microsoft Corp MSFT Dan Romanoff, CPA - Senior Equity Analyst - Morningstar Inc.

Income Statement
	2019	2020	2021	2022	2023
Revenue	125,843.00	143,015.00	168,088.00	198,270.00	211,915.00
Cost of Revenue	42,910.00	46,078.00	52,232.00	62,650.00	65,863.00
Gross Operating Profit	82,933.00	96,937.00	115,856.00	135,620.00	146,052.00
Operating expenses
Research and development	16,876.00	19,269.00	20,716.00	24,512.00	27,195.00
Sales, general and administrative	23,098.00	24,709.00	25,224.00	27,725.00	30,334.00
Staff cost	-	-	-	-	-
Depreciation and amortization	-	-	-	-	-
Other Operating Expenses	0.00	0.00	0.00	0.00	0.00
Total Operating Expenses	39,974.00	43,978.00	45,940.00	52,237.00	57,529.00
Operating income before interest and taxes	42,959.00	52,959.00	69,916.00	83,383.00	88,523.00
Non-operating income	729.00	77.00	1,186.00	333.00	788.00
Income before income taxes	43,688.00	53,036.00	71,102.00	83,716.00	89,311.00
Provision for income taxes	4,448.00	8,755.00	9,831.00	10,978.00	16,950.00
Net income from continuing operations	39,240.00	44,281.00	61,271.00	72,738.00	72,361.00
Net Income	39,240.00	44,281.00	61,271.00	72,738.00	72,361.00
Net income available for common shareholders	39,240.00	44,281.00	61,271.00	72,738.00	72,361.00
Earnings per share
Basic	5.11	5.82	8.12	9.70	9.72
Diluted	5.06	5.76	8.05	9.65	9.68

Figures in millions. Currency is USD.

Dan Romanoff, CPA - Senior Equity Analyst - Morningstar Inc.

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Fair Value is derived from a detailed projection of a company’s future cash flows. Analysts create custom industry and company assumptions to feed income statement, balance sheet, and capital investment assumptions into a proprietary discounted cash flow modeling template. Scenario analysis, in-depth competitive advantage analysis, and a variety of other analytical tools are used to augment the discounted cash flow process. Combining analysts’ financial forecasts with the firm’s economic moat helps us assess how long returns on invested capital are likely to exceed the firm’s cost of capital. Because we are modeling free cash flow to the firm—representing cash available to provide a return to all capital providers—we discount future cash flows using the weighted average of the costs of equity, debt, and preferred stock (and any other funding sources), using expected future proportionate long-term, market-value weights. If our base-case assumptions are true the market price will converge on our fair value estimate over time, generally within three years. Investments in securities are subject to market and other risks. Past performance of a security may or may not be sustained in future and is no indication of future performance. For detail information about the Qualitative Fair Value, please click here.