Microsoft Corporation (MSFT)
Return on total capital
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 117,167,000 | 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 |
| Long-term debt | US$ in thousands | 39,722,000 | 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 |
| 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 |
| Return on total capital | 34.22% | 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% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $117,167,000K ÷ ($39,722,000K + $302,695,000K)
= 34.22%
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.
Peer comparison
Dec 31, 2024