Microsoft Corporation (MSFT)

Fixed asset turnover

		Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019
Revenue	US$ in thousands	209,747,000	196,109,000	165,936,000	140,503,000	123,495,000
Property, plant and equipment	US$ in thousands	95,641,000	74,398,000	59,715,000	44,151,000	36,477,000
Fixed asset turnover		2.19	2.64	2.78	3.18	3.39

June 30, 2023 calculation

Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $209,747,000K ÷ $95,641,000K
= 2.19

The fixed asset turnover ratio measures how efficiently a company is using its fixed assets to generate sales. A higher ratio indicates better utilization of fixed assets to generate sales revenue. Let's analyze the trend in Microsoft Corporation's fixed asset turnover over the past five years:

- In Jun 30, 2023, the fixed asset turnover ratio was 2.22, indicating that for every dollar invested in fixed assets, Microsoft generated $2.22 in sales.
- Compared to the previous year (2.66 in Jun 30, 2022), there was a decrease in the fixed asset turnover, suggesting a reduction in sales generated per dollar of fixed assets invested.
- Looking further back, the trend shows a gradual decline in the fixed asset turnover ratio over the years, from 2.81 in Jun 30, 2021, to 3.24 in Jun 30, 2020, and 3.45 in Jun 30, 2019.

The decreasing trend in the fixed asset turnover ratio suggests that Microsoft's efficiency in utilizing its fixed assets to generate sales has declined over the years. This could be attributed to various factors such as changes in business strategies, technology advancements, or shifts in the company's asset base.

It's important for investors and analysts to further investigate the reasons behind this declining trend in fixed asset turnover to assess the company's asset management and operational efficiency. Additionally, exploring potential improvements in asset utilization and sales generation could be key areas for Microsoft to address in order to enhance its overall financial performance.