Microsoft Corporation (MSFT)
Return on total capital
| 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 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 103,622,000 | 97,016,000 | 91,279,000 | 87,053,000 | 84,577,000 | 86,788,000 | 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 | 52,484,000 | 48,802,000 | 46,374,000 | 44,461,000 |
| Long-term debt | US$ in thousands | 44,928,000 | 41,946,000 | 41,990,000 | 41,965,000 | 44,119,000 | 45,374,000 | 47,032,000 | 48,177,000 | 48,260,000 | 50,039,000 | 50,074,000 | 50,007,000 | 55,136,000 | 57,055,000 | 59,578,000 | 62,862,000 | 63,361,000 | 66,478,000 | 66,662,000 | 66,585,000 |
| Total stockholders’ equity | US$ in thousands | 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 | 106,061,000 | 102,330,000 | 94,864,000 |
| Return on total capital | 36.59% | 36.94% | 36.77% | 36.79% | 37.22% | 39.64% | 40.16% | 40.15% | 39.34% | 38.51% | 38.24% | 36.64% | 34.09% | 32.71% | 31.27% | 30.89% | 30.26% | 28.28% | 27.44% | 27.54% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $103,622,000K ÷ ($44,928,000K + $238,268,000K)
= 36.59%
To analyze Microsoft Corporation's return on total capital, we can observe a consistent trend over the past eight quarters. The return on total capital has shown a gradual decline from 38.55% in the second quarter of 2022 to 32.17% in the fourth quarter of 2023. During this period, the figure fluctuated within a relatively narrow range, reflecting stability in the company's ability to generate profit from the total capital employed.
The return on total capital indicates the efficiency of Microsoft's capital allocation and utilization. The downward trend suggests that the company may be experiencing challenges in generating returns in proportion to the total capital employed. It is important to consider the underlying factors influencing this trend, such as changes in the capital structure, operational performance, and overall economic conditions.
Further analysis of Microsoft's financial and operational strategies, as well as comparison with industry benchmarks and peers, can provide valuable insights into the factors driving the return on total capital and help in assessing the company's overall financial performance and capital efficiency.
Peer comparison
Dec 31, 2023