Microsoft Corporation (MSFT)

Debt-to-assets ratio

		Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019
Long-term debt	US$ in thousands	41,990,000	47,032,000	50,074,000	59,578,000	66,662,000
Total assets	US$ in thousands	411,976,000	364,840,000	333,779,000	301,311,000	286,556,000
Debt-to-assets ratio		0.10	0.13	0.15	0.20	0.23

June 30, 2023 calculation

Debt-to-assets ratio = Long-term debt ÷ Total assets
= $41,990,000K ÷ $411,976,000K
= 0.10

The debt-to-assets ratio of Microsoft Corporation has shown a declining trend over the past five years, decreasing from 0.25 in June 2019 to 0.11 in June 2023. This ratio indicates the proportion of the company's assets that are financed by debt. A lower ratio suggests that a smaller portion of the company's assets is funded by debt, which can be seen as a positive sign of greater financial stability and lower solvency risk. Microsoft's decreasing debt-to-assets ratio reflects a reduction in reliance on debt financing to fund its operations and investments, potentially signaling a stronger financial position and improved risk management. This trend may be indicative of the company's effective capital management and prudent financial decision-making, enhancing its overall creditworthiness and capacity to weather economic downturns.