Microsoft Corporation (MSFT)

Financial leverage ratio

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Total assets	US$ in thousands	512,163,000	411,976,000	364,840,000	333,779,000	301,311,000
Total stockholders’ equity	US$ in thousands	268,477,000	206,223,000	166,542,000	141,988,000	118,304,000
Financial leverage ratio		1.91	2.00	2.19	2.35	2.55

June 30, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $512,163,000K ÷ $268,477,000K
= 1.91

The financial leverage ratio of Microsoft Corporation has shown a downward trend over the past five years, declining from 2.55 in June 2020 to 1.91 in June 2024. This indicates that the company has reduced its reliance on debt financing in relation to equity over the period. A decreasing trend in the financial leverage ratio suggests improved financial stability and reduced financial risk for the company, as lower leverage ratios indicate less debt relative to equity. Microsoft's decreasing leverage ratio may reflect prudent financial management decisions aimed at strengthening its financial position and enhancing long-term sustainability. Overall, the decreasing trend in the financial leverage ratio is a positive indication of Microsoft Corporation's financial health and solvency.