Microsoft Corporation (MSFT)

Return on assets (ROA)

		Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019
Net income	US$ in thousands	72,361,000	72,738,000	61,271,000	44,281,000	39,240,000
Total assets	US$ in thousands	411,976,000	364,840,000	333,779,000	301,311,000	286,556,000
ROA		17.56%	19.94%	18.36%	14.70%	13.69%

June 30, 2023 calculation

ROA = Net income ÷ Total assets
= $72,361,000K ÷ $411,976,000K
= 17.56%

Microsoft Corporation's return on assets (ROA) measures the company's ability to generate profits from its assets. Looking at the trend over the past five years, we observe that Microsoft's ROA has been consistently increasing, indicating improved efficiency in asset utilization.

In the most recent fiscal year ending June 30, 2023, Microsoft achieved an ROA of 17.56%, a slight decrease from 19.94% in the previous year. Despite this decrease, the company's ROA remains relatively high, reflecting its strong profitability relative to its asset base.

The uptrend in ROA from 13.69% in 2019 to 17.56% in 2023 suggests that Microsoft has been effectively utilizing its assets to generate earnings. This improvement may be attributed to strategic investments in research and development, acquisitions, and innovations in products and services.

It is important to note that a higher ROA indicates more efficient asset utilization, which is favorable for shareholders and potential investors. Nonetheless, a decrease in ROA should be further analyzed to determine the factors contributing to the change and assess whether it is a temporary fluctuation or a potential concern.

Overall, the upward trend in Microsoft's ROA demonstrates its ability to enhance profitability by effectively employing its assets, contributing to its strong financial performance over the years.