Microsoft Corporation (MSFT)

Return on total capital

		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	Sep 30, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	113,323,000	107,980,000	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
Long-term debt	US$ in thousands	42,868,000	42,658,000	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
Total stockholders’ equity	US$ in thousands	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	106,061,000
Return on total capital		34.28%	36.50%	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%

September 30, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $113,323,000K ÷ ($42,868,000K + $287,723,000K)
= 34.28%

The return on total capital for Microsoft Corporation has shown a generally positive trend over the past few quarters, with fluctuations within a relatively narrow range. The return on total capital was 34.28% as of September 30, 2024, which is slightly lower compared to the previous quarter. However, when looking at a longer timeline, the return on total capital has generally been increasing since December 2019.

The return on total capital peaked at 40.16% as of June 30, 2022, and has since remained above 30%, indicating that Microsoft has been effectively utilizing its total capital to generate profits. This strong performance suggests that Microsoft has been efficiently managing its capital investments and generating positive returns for its shareholders.

Overall, the consistent improvement in return on total capital reflects Microsoft's ability to generate value from its capital investments and indicates a solid financial performance.