Microsoft Corporation (MSFT)

Pretax margin

		Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019
Earnings before tax but after interest (EBT)	US$ in thousands	89,311,000	83,716,000	71,102,000	53,036,000	43,688,000
Revenue	US$ in thousands	209,747,000	196,109,000	165,936,000	140,503,000	123,495,000
Pretax margin		42.58%	42.69%	42.85%	37.75%	35.38%

June 30, 2023 calculation

Pretax margin = EBT ÷ Revenue
= $89,311,000K ÷ $209,747,000K
= 42.58%

Looking at the pretax margin of Microsoft Corporation over the past five years, we can see a consistent trend of improvement.

In 2019, the pretax margin was 34.72%, indicating that for every dollar of revenue, the company generated approximately 34.72 cents in pretax profit. Over the next year, there was a notable increase to 37.08%, showing a positive upward trajectory.

By 2021, the pretax margin continued to improve, reaching 42.30%. This demonstrates Microsoft's ability to effectively manage its costs and expenses in relation to its revenue, resulting in a higher level of profitability before taxes.

The trend continued into 2022 and 2023, with pretax margins of 42.22% and 42.14% respectively. This suggests that Microsoft has been successful in maintaining its profitability even as its revenue grows, indicating strong cost management and operational efficiency.

The consistent improvement in pretax margin over the years reflects positively on Microsoft's financial performance, as it indicates the company's ability to generate higher earnings relative to its revenue, which is a key indicator of financial health and efficiency. This improvement also suggests that Microsoft has been able to effectively control its operating costs and expenses, leading to stronger profitability and financial performance. Overall, this trend in pretax margin indicates a positive and healthy financial outlook for Microsoft Corporation.