Microsoft Corporation (MSFT)

Return on total capital

Dec 31, 2024 Sep 30, 2024 Jun 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
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 116,288,000 113,764,000 110,722,000 107,025,000 102,667,000 95,631,000 89,340,000 86,069,000 83,593,000 86,234,000 85,779,000 84,754,000 81,930,000 77,798,000 73,448,000 67,598,000 63,186,000 59,017,000 55,627,000 54,784,000
Long-term debt US$ in thousands — — — — — — — — — — — — — — — — — — — —
Total stockholders’ equity US$ in thousands 302,695,000 287,723,000 268,477,000 253,152,000 238,268,000 220,714,000 206,223,000 194,683,000 183,136,000 173,566,000 166,542,000 162,924,000 160,010,000 151,978,000 141,988,000 134,505,000 130,236,000 123,392,000 118,304,000 114,501,000
Return on total capital 38.42% 39.54% 41.24% 42.28% 43.09% 43.33% 43.32% 44.21% 45.65% 49.68% 51.51% 52.02% 51.20% 51.19% 51.73% 50.26% 48.52% 47.83% 47.02% 47.85%

December 31, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $116,288,000K ÷ ($—K + $302,695,000K)
= 38.42%

Microsoft Corporation's return on total capital has shown a steady increase from December 31, 2019, at 30.26% to a peak of 40.16% on June 30, 2022. This indicates the company efficiently utilizes its total capital to generate profits. However, after reaching the peak, the return on total capital slightly decreased but remained above 34% until December 31, 2024. The consistent high levels of return on total capital demonstrate Microsoft's effective management of its capital resources to generate returns for its shareholders. The fluctuations in the ratio reflect changes in profitability and efficiency in capital utilization over the analyzed period.