Microsoft Corporation (MSFT)

Return on assets (ROA)

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Net income	US$ in thousands	101,832,000	88,136,000	72,361,000	72,738,000	61,271,000
Total assets	US$ in thousands	619,003,000	512,163,000	411,976,000	364,840,000	333,779,000
ROA		16.45%	17.21%	17.56%	19.94%	18.36%

June 30, 2025 calculation

ROA = Net income ÷ Total assets
= $101,832,000K ÷ $619,003,000K
= 16.45%

The analysis of Microsoft Corporation's Return on Assets (ROA) over the specified period indicates a pattern of fluctuation that reflects the company's evolving efficiency in generating profits from its asset base. As of June 30, 2021, the ROA stood at 18.36%, suggesting a strong ability to convert assets into net income during that fiscal year. This figure increased in the subsequent year, reaching 19.94% on June 30, 2022, which signifies an improvement in asset utilization and profitability efficiency.

However, this upward trajectory was not sustained in the following years. By June 30, 2023, the ROA decreased to 17.56%, reflecting a reduction in the effectiveness of the company's asset base in generating net income. The declining trend continued into June 30, 2024, with the ROA decreasing slightly to 17.21%. Further decline is observed in the fiscal year ending June 30, 2025, when the ROA declined to 16.45%.

This overall pattern indicates that while Microsoft had periods of enhanced asset efficiency—particularly in the year ending June 30, 2022—there has been a gradual decline in ROA over the recent years. The downward trend may suggest increased asset investment without proportional increases in net income, potential changes in operational efficiency, or shifting business strategies. Nonetheless, the ROA remains relatively high compared to many industry peers, suggesting that Microsoft continues to utilize its assets effectively, despite the observed declines.