Microsoft Corporation (MSFT)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.76 | 1.82 | 1.91 | 1.91 | 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 |
The solvency ratios of Microsoft Corporation show a consistently improving financial position over the years. The Debt-to-Assets ratio, which measures the proportion of the company's assets financed by debt, has been declining from 0.22 as of December 31, 2019, to 0.07 as of December 31, 2024. This indicates that Microsoft's reliance on debt to fund its assets has been decreasing, which is a positive trend.
The Debt-to-Capital ratio, which indicates the proportion of the company's capital structure that is financed by debt, has also shown a downward trend from 0.37 as of December 31, 2019, to 0.12 as of December 31, 2024. This suggests that Microsoft has been lowering its debt levels relative to its total capital, which is a good sign for solvency and financial stability.
The Debt-to-Equity ratio, representing the relationship between debt and shareholder equity, has decreased from 0.58 as of December 31, 2019, to 0.13 as of December 31, 2024. This decline demonstrates that Microsoft has been effectively managing its debt relative to equity, resulting in a stronger financial position and lower risk of default.
Lastly, the Financial Leverage ratio, which measures the company's overall debt level in relation to its equity, has decreased from 2.57 as of December 31, 2019, to 1.76 as of December 31, 2024. This reduction in financial leverage indicates that Microsoft's debt obligations have been decreasing in comparison to its equity, reflecting enhanced solvency and financial health.
Overall, the solvency ratios of Microsoft Corporation reflect a positive trend towards a more stable and secure financial position, with decreasing reliance on debt and improved debt management practices.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 43.44 | 38.02 | 37.72 | 39.41 | 42.57 | 47.98 | 45.40 | 43.43 | 42.03 | 42.61 | 41.58 | 39.98 | 36.41 | 33.88 | 31.31 | 27.27 | 25.69 | 23.21 | 21.47 | 21.28 |
The interest coverage ratio for Microsoft Corporation has shown a steady improvement over the past few years, indicating the company's ability to cover its interest expenses with its earnings.
From December 2019 to December 2024, the interest coverage ratio has consistently increased from 19.95 to 40.61. This upward trend suggests that Microsoft's profitability and operating performance have strengthened, allowing the company to comfortably meet its interest obligations.
The ratio reached its peak at 48.68 in September 2023 and slightly decreased thereafter, but still remained at a healthy level. A high interest coverage ratio is generally seen as a positive signal by investors and creditors, indicating a lower risk of default on debt payments.
In conclusion, the increase in Microsoft's interest coverage ratio reflects the company's solid financial health and ability to manage its debt obligations effectively over the analyzed period.