Microsoft Corporation (MSFT)
Fixed asset turnover
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 281,724,000 | 245,122,000 | 211,915,000 | 198,270,000 | 168,088,000 |
| Property, plant and equipment | US$ in thousands | 229,789,000 | 154,552,000 | 109,987,000 | 87,546,000 | 70,803,000 |
| Fixed asset turnover | 1.23 | 1.59 | 1.93 | 2.26 | 2.37 |
June 30, 2025 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $281,724,000K ÷ $229,789,000K
= 1.23
The fixed asset turnover ratio for Microsoft Corporation has exhibited a consistent decline over the period from June 30, 2021, to June 30, 2025. Specifically, the ratio decreased from 2.37 in 2021 to 2.26 in 2022, reflecting a modest reduction in the efficiency with which fixed assets generate revenue. This downward trend continued more noticeably in subsequent years, with the ratio declining to 1.93 in 2023, then to 1.59 in 2024, and further down to 1.23 in 2025.
This pattern indicates that Microsoft's utilization of its fixed assets to generate sales has become less efficient over the analyzed period. Several factors could contribute to this decline, including substantial investments in fixed assets that have not yet translated into proportionate revenue increases, operational shifts towards more intangible or digital assets, or strategic restructuring that impacts asset utilization metrics. Overall, the diminished fixed asset turnover ratio suggests a gradual decrease in the effectiveness of fixed assets in generating sales revenue, warranting further investigation into the company’s asset management strategies and capital expenditure efficiencies.
Peer comparison
Jun 30, 2025