Microsoft Corporation (MSFT)

Operating profit margin

		Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019
Operating income	US$ in thousands	88,523,000	83,383,000	69,916,000	52,959,000	42,959,000
Revenue	US$ in thousands	209,747,000	196,109,000	165,936,000	140,503,000	123,495,000
Operating profit margin		42.20%	42.52%	42.13%	37.69%	34.79%

June 30, 2023 calculation

Operating profit margin = Operating income ÷ Revenue
= $88,523,000K ÷ $209,747,000K
= 42.20%

Microsoft Corporation's operating profit margin has shown a consistent trend of improvement over the past five years. As of June 30, 2023, the operating profit margin stood at 41.77%, slightly down from 42.06% in the previous year but still higher than the margins reported in 2021 and 2020, which were 41.59% and 37.03% respectively. This indicates that the company has been effectively managing its operating expenses and generating increased profit from its core business operations.

The significant improvement in operating profit margin from 34.14% in 2019 to the current level signals a steady and positive trend in the company's operational efficiency and profitability. A higher operating profit margin implies that Microsoft is effectively controlling its production and operating costs while generating strong revenue from its products and services.

The consistency in maintaining operating profit margin above 40% over the past few years indicates Microsoft's ability to efficiently convert its revenue into profit after accounting for variable costs associated with production and operating activities. This trend generally points to effective cost management, pricing strategies, and operational excellence within the organization. However, the slight decline in the latest year's margin should be monitored to assess if it represents a temporary fluctuation or a potential shift in the company's operational performance.

Overall, Microsoft's operating profit margin trend reflects the company's ability to generate profit from its core business operations and suggests a strong financial position and effective cost management strategies. Monitoring this metric in the future will be crucial to evaluate the company's ability to maintain and improve its profitability.