Microsoft Corporation (MSFT)

Financial leverage ratio

		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	Jun 30, 2019	Mar 31, 2019
Total assets	US$ in thousands	470,558,000	445,785,000	411,976,000	380,088,000	364,552,000	359,784,000	364,840,000	344,607,000	340,389,000	335,418,000	333,779,000	308,879,000	304,137,000	301,001,000	301,311,000	285,449,000	282,794,000	278,955,000	286,556,000	263,281,000
Total stockholders’ equity	US$ in thousands	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	102,330,000	94,864,000
Financial leverage ratio		1.97	2.02	2.00	1.95	1.99	2.07	2.19	2.12	2.13	2.21	2.35	2.30	2.34	2.44	2.55	2.49	2.57	2.63	2.80	2.78

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $470,558,000K ÷ $238,268,000K
= 1.97

The financial leverage ratio of Microsoft Corporation has shown fluctuations over the past eight quarters. The ratio, which measures the extent to which the company relies on debt to finance its assets, has ranged from 1.95 to 2.19 during this period.

A higher financial leverage ratio indicates that a company is more reliant on debt financing, which can amplify returns on equity but also increase the risk of financial distress. The recent trend in Microsoft's leverage ratio suggests a moderate increase in the company's reliance on debt to finance its operations and investments.

The increase in the financial leverage ratio may indicate that Microsoft has been taking on additional debt to fund its growth initiatives or capital expenditures. However, it is important to closely monitor this trend to assess the company's ability to manage its debt obligations and maintain a healthy balance sheet.