Microsoft Corporation (MSFT)
Debt-to-capital 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 stockholders’ equity | US$ in thousands | 206,223,000 | 166,542,000 | 141,988,000 | 118,304,000 | 102,330,000 |
| Debt-to-capital ratio | 0.17 | 0.22 | 0.26 | 0.33 | 0.39 |
June 30, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $41,990,000K ÷ ($41,990,000K + $206,223,000K)
= 0.17
The debt-to-capital ratio of Microsoft Corporation has decreased from 0.41 in 2019 to 0.19 in 2023. This trend indicates that the company has been successful in reducing its reliance on debt to finance its operations and investments compared to its capital resources.
A lower debt-to-capital ratio reflects a more conservative financial structure, as the company has decreased its debt burden relative to its capital. This can be considered a positive indicator as it suggests improved financial stability and reduced financial risk.
The trend suggests that Microsoft has been managing its capital structure effectively, possibly by using profits to pay down debt, issuing equity, or making strategic investment decisions. This may enhance the company's financial flexibility and improve its ability to weather economic downturns or pursue growth opportunities.
Overall, the decreasing trend in the debt-to-capital ratio of Microsoft Corporation indicates a positive financial position and effective capital management over the years.
Peer comparison
Jun 30, 2023