Microsoft Corporation (MSFT)

Return on equity (ROE)

		Dec 31, 2024	Sep 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019
Net income (ttm)	US$ in thousands	92,584,000	90,767,000	86,181,000	82,541,000	77,096,000	72,361,000	69,020,000	67,449,000	69,789,000	72,738,000	72,456,000	71,185,000	67,883,000	61,271,000	56,015,000	51,310,000	47,496,000	44,281,000	46,266,000	44,323,000
Total stockholders’ equity	US$ in thousands	302,695,000	287,723,000	253,152,000	238,268,000	220,714,000	206,223,000	194,683,000	183,136,000	173,566,000	166,542,000	162,924,000	160,010,000	151,978,000	141,988,000	134,505,000	130,236,000	123,392,000	118,304,000	114,501,000	110,109,000
ROE		30.59%	31.55%	34.04%	34.64%	34.93%	35.09%	35.45%	36.83%	40.21%	43.68%	44.47%	44.49%	44.67%	43.15%	41.65%	39.40%	38.49%	37.43%	40.41%	40.25%

December 31, 2024 calculation

ROE = Net income (ttm) ÷ Total stockholders’ equity
= $92,584,000K ÷ $302,695,000K
= 30.59%

Microsoft Corporation's return on equity (ROE) has exhibited fluctuating trends over the past few years, starting at a robust 40.25% as of December 31, 2019, and peaking at 44.67% by September 30, 2021. This upward trajectory demonstrated the company's ability to generate significant profits relative to shareholders' equity.

However, the ROE saw a slight dip to 36.83% by the end of December 31, 2022, and the trend continued downward to 30.59% by the end of December 31, 2024. This decline suggests that Microsoft may be facing challenges in efficiently utilizing shareholders' equity to generate profits or that its overall profitability is decreasing.

It is essential for Microsoft to closely monitor its ROE trend and identify the factors contributing to the recent decline to address any underlying issues that might be impacting its profitability and shareholder value. Implementing strategies to improve operational efficiency and profitability may be necessary to ensure a sustainable and healthy return on equity moving forward.