Microsoft (MSFT) Balance Sheet & Financial Health Metrics - Simply Wall St (2024)

FAQs

Does Microsoft have a good balance sheet? ›

Summary. Microsoft has a healthy balance sheet considering its significant cash position, and its good solvency and liquidity financial ratios. The company has gained meaningful traction in AI judging by specific metrics relating to its Q3 FY 2023 results and Q4 FY 2023 guidance.

Microsoft Balance Sheet Health

Microsoft has a total shareholder equity of $253.2B and total debt of $65.4B, which brings its debt-to-equity ratio to 25.9%. Its total assets and total liabilities are $484.3B and $231.1B respectively. Microsoft's EBIT is $105.8B making its interest coverage ratio -159.8.

Microsoft (Microsoft) Interest Coverage : 34.48 (As of Mar. 2024)

On a year-over-year basis, Microsoft earnings increased 20% while sales rose 17%. For the current quarter, Microsoft forecast sales of $63.5 billion to $64.5 billion. The midpoint of $64 billion was below the consensus estimate of $64.6 billion for the June quarter, according to FactSet.

Total debt on the balance sheet as of March 2024 : $79.91 B

According to Microsoft's latest financial reports the company's total debt is $79.91 B. A company's total debt is the sum of all current and non-current debts.

Healthcare NExT is a new initiative from Microsoft aimed at transforming the healthcare sector by leveraging its existing AI work and Azure cloud resources. Specifically, by collaborating with existing healthcare players that augment existing Microsoft Research and AI units.

Which company has the highest cash reserve? ›

Research by the professors at Kellogg School of Management found that reserves of Apple, Inc. (NASDAQ:AAPL), Alphabet, Inc. (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT) accounted for 92% of cash reserves that they could document.

Microsoft's operated at median total debt / total capital of 3.9% from fiscal years ending June 2019 to 2023. Looking back at the last 5 years, Microsoft's total debt / total capital peaked in June 2019 at 7.8%. Microsoft's total debt / total capital hit its 5-year low in June 2023 of 3.0%.

What is Microsoft Financial Strength? Microsoft has the Financial Strength Rank of 8. It shows strong financial strength and is unlikely to fall into distressed situations.

Solvency Summary

Microsoft Corp's solvency score is 68/100. We take all the information about a company's solvency (such as how easily a company can pay interest on its outstanding debt, how much cash it has, the amount of debt, and more) and consolidate it into one single number - the solvency score.

Over the last ten years, the average PE ratio of Microsoft has been 29.58. The current 35.9 price-to-earnings ratio is 21% more than the historical average. Analyzing the last ten years, MSFT's PE ratio reached its highest point in the Dec 2017 quarter at 48.06, with a price of $85.54 and an EPS of $1.78.

87% of Microsoft employees would recommend working there to a friend based on Glassdoor reviews. Employees also rated Microsoft 4.1 out of 5 for work life balance, 4.3 for culture and values and 4.1 for career opportunities.

Microsoft reported earnings per share (EPS) of $2.94 on revenue of $61.9 billion. Wall Street was anticipating EPS of $2.83 on revenue of $60.88 billion, according to analysts' estimates compiled by Bloomberg.

The mean historical ROE of Microsoft Corporation over the last ten years is 32.13%. The current 37.54% ROE has changed 16.84% with respect to the historical average. Over the past ten years (40 quarters), MSFT's ROE was at its highest in in the September 2021 quarter at 13.49%.

The strength of a company's balance sheet can be evaluated by three broad categories of investment-quality measurements: working capital, or short-term liquidity, asset performance, and capitalization structure. Capitalization structure is the amount of debt versus equity that a company has on its balance sheet.