How high will Microsoft fly? Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : How high will Microsoft fly?

MSFT 478.53

-1.0%

Dec 12 9:30 AM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: johnd who wrote (22371)	5/8/1999 3:00:00 PM
From: t2	Read Replies (1) of 74651

johnd, The only problem with margins going up is that MSFT sets itself up as a bigger target for government as well as consumer groups. IMHO, a part of the reason for that unearned revenue account was to prevent the gross margins from going higher at a faster rate. They do not appear to have any "prepaid expenses" on the asset side of the balance sheet to match against the unearned revenue liability. The only time the unearned revenue account starts to shrink will be when the company starts experiencing year over year declining revenues. That appears to be several years away---meaning the unearned revenue account should keep going up. It is also possible that MSFT may actually start deferring more revenue by adopting an even more conservative accounting policy to ensure that margins don't go up(or at least not too much higher) Higher and higher gross margins puts the company under more scrunity (charges of operating a monopoly). That is why they will try their best to keep margins in check as they have tried these last couple of years. IMHO of course.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next