Microsoft Corporation (MSFT)
Profitability ratios
Return on sales
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 69.76% | 68.92% | 68.40% | 68.93% | 67.78% |
| Operating profit margin | 44.64% | 41.77% | 42.06% | 41.59% | 37.03% |
| Pretax margin | 43.97% | 42.14% | 42.22% | 42.30% | 37.08% |
| Net profit margin | 35.96% | 34.15% | 36.69% | 36.45% | 30.96% |
Microsoft Corporation has shown a consistent improvement in its profitability ratios over the past five years. The gross profit margin has increased steadily from 67.78% in June 30, 2020, to 69.76% in June 30, 2024, indicating the company's ability to generate more profit from its core operations.
Similarly, the operating profit margin has also demonstrated a positive trend, rising from 37.03% in June 30, 2020, to 44.64% in June 30, 2024. This metric reflects Microsoft's efficiency in managing its operating expenses and generating profit before interest and taxes.
The pretax margin, representing the proportion of each dollar of revenue that translates into pre-tax profit, has shown a slight fluctuation but remained relatively stable over the period. It ranged from 37.08% in June 30, 2020, to 43.97% in June 30, 2024, indicating Microsoft's consistent profitability before accounting for taxes.
Finally, the net profit margin, reflecting the company's bottom-line profitability after all expenses have been deducted, has also displayed a positive trajectory. It increased from 30.96% in June 30, 2020, to 35.96% in June 30, 2024, demonstrating Microsoft's ability to maintain and enhance its profitability over the years.
Overall, Microsoft Corporation has shown commendable performance in terms of profitability ratios, reflecting its effective cost management and revenue generation capabilities.
Return on investment
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 21.37% | 21.49% | 22.85% | 20.95% | 17.58% |
| Return on assets (ROA) | 17.21% | 17.56% | 19.94% | 18.36% | 14.70% |
| Return on total capital | 41.24% | 44.26% | 51.51% | 51.73% | 47.02% |
| Return on equity (ROE) | 32.83% | 35.09% | 43.68% | 43.15% | 37.43% |
Based on the data provided, Microsoft Corporation's profitability ratios show a positive trend over the period from June 30, 2020, to June 30, 2024.
1. Operating Return on Assets (Operating ROA):
- The Operating ROA has been steadily increasing from 17.58% in June 2020 to 21.37% in June 2024. This indicates that the company's operating income generated from its assets has been improving, reflecting efficient operations.
2. Return on Assets (ROA):
- The ROA also shows an upward trend, increasing from 14.70% in June 2020 to 17.21% in June 2024. This suggests that Microsoft has been effectively utilizing its assets to generate profits.
3. Return on Total Capital:
- The Return on Total Capital has shown fluctuations but generally remains strong, starting at 47.02% in June 2020, peaking at 51.73% in June 2021, and declining slightly to 41.24% in June 2024. This ratio indicates the efficiency of the company in generating returns from both equity and debt capital.
4. Return on Equity (ROE):
- The ROE has followed a similar trend as the other ratios, starting at 37.43% in June 2020 and declining to 32.83% in June 2024. Despite the decrease, the ROE remains at healthy levels, reflecting the company's ability to generate profits from shareholders' equity.
Overall, Microsoft Corporation's profitability ratios demonstrate a consistent improvement in operational efficiency and asset utilization, indicating a positive outlook for the company's financial performance in the analyzed period.