Comparative analysis of two tech giants under the financial perspective: Microsoft versus Alphabet

Abstract

This paper provides a comparison of two key players in the IT industry, Microsoft and Alphabet, from a financial point of view. After analysing the IT industry and introducing the main theoretical concepts of the paper, the study gives a general overview of the two tech giants and compares their business models focusing on how they create and capture value. Furthermore, the case study includes a calculation of financial ratios using secondary data and explains the effect of the Coronavirus pandemic on the companies’ financial performance. Finally, their capital structure and their alleged anti-competitive actions are discussed, outlining two court cases of great importance and their consequences on stock prices.