This research examines the company's recent financial performance and considers the 1998 annual report issued by Morgan Stanley Dean Witter. In addition, the outlook for this company is considered based on this information.
Dean Witter was formed in the mid-1920s in San Francisco; Morgan Stanley was formed in the mid-1930s in response to the Glass-Steagall Banking Act which placed restrictions on the banking industry. The two firms competed throughout the twentieth century with Dean Witter often taking major steps several years ahead of Morgan Stanley (for example, Dean Witter gained a seat on the New York Stock Exchange well before Morgan Stanley. Mergers and acquisitions characterized Dean Witter's growth while Morgan Stanley generated growth from within. Both companies were early implementers of computers and electronic data processing within their organizations. Dean Witter became a publicly traded company in 1972 and was acquired by Sears in 1981; Morgan Stanley went public in 1986, the same year that Dean Witter launched the Discover card on a nationwide basis. In 1992 and 1993, Sears spun off Dean Witter, and the two companies merged in 1997 with headquarters in New York ("About MSDW," 1999, p. 1).
The most recent annual report available is for 1998 (the company's fiscal year ends on November 30). Filed with the Securities and Exchange Commission, the 10-K, or annual report, provides information about the companies activities and financial performance. The 1998 annual report provides balance sheet information for fiscal years 1998 and 1997; income statement data is provided for 1996, 1997 and 1998. These are consolidated financial statements, which means that supporting information has been incorporated into the data provided to investors and the Securities and Exchange Commission.
The company divides its operations into three primary product areas: securities, asset management and credit and transaction ser...