Financial Statement Analysis of MSC Software Corp.

Candice BrownNicole Caselli

Aaron CastanedaLavanya Sankaran

MSC Software Corp. Founded in 1963 by Dr. Richard MacNeal and Mr. Robert

Schwendler Headquartered in Santa Ana, California Employs more than 1,200 people in 23 countries The leading global provider of integrated enterprise simulation

solutions Products of MSC:

SimManager MD Solutions SimOffice FlightLoads AFEA Fatigue

SimXpert SimDesigner FEA TFEA MVision Sofy

Ansys Inc. Founded in 1970 Headquartered in Canonsburg, Pennsylvania Approximately 1,700 employees, many of whom are engineers

with advanced degrees and extensive training. Develops, markets, and supports engineering simulation

software used to predict how product designs will operate and how manufacturing processes will behave in real-world environments.

Parametric Technology Corp. (PTC) Founded in 1985 Headquartered in Boston, Massachusetts Design engineering software Among the largest independent software companies in the

world Develops, markets and supports software solutions that help

customers improve the competitiveness of their products and product development processes.

Started acquiring different design companies in 2004 and have acquired 10 since then.

Current Ratio

2006: 1.811 2007: 1.910 2008: 2.070

0

0.5

1

1.5

2

2.5

2006 2007 2008

MSC Ansys PTC

Debt/Equity Ratio

2006: 47.60% 2007: 46.00% 2008: 43.00%

0%

50%

100%

150%

2006 2007 2008

MSC Ansys PTC

Profit Margin

2006: 5.30%

2007: 0.60%

2008: -8.40%-10%

0%

10%

20%

30%

2006 2007 2008

MSC Ansys PTC

Cost of Sales

2006: 22.40%

2007: 18.80%

2008: 18.90%0%

10%

20%

30%

40%

2006 2007 2008

MSC Ansys PTC

Return on Assets (ROA)

2006: 3.50%

2007: -0.20%

2008: 3.60%-2%

0%

2%

4%

6%

8%

2006 2007 2008

MSC Ansys PTC

Return on Equity (ROE)

2006: 4.40%

2007: -0.50%

2008: -6.80%-10%

0%

10%

20%

30%

2006 2007 2008

MSC Ansys PTC

PE Ratio

*2006: 43.03% *2007: -299.50 *2008: -14.38%

-300

-200

-100

0

100

200

2006 2007 2008

MSC Ansys PTC

Conclusion Individual numbers are inconclusive Trends show improvement Comparison with competitors shows a fiscal advantage Overall, MSC Software is a successful company in the software

industry. Acquisitions resulted in significant losses however, in the long

run the ratios indicate profitability is increasing. For investors, this is a prime time to buy shares of MSC stock.