Microsoft Corporation (MSFT)
Solvency ratios
| Jun 30, 2025 | Mar 31, 2025 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 | 1.80 | 1.75 | 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 |
The analysis of Microsoft Corporation's solvency ratios over the period reflects a consistent portrayal of financial stability, particularly in terms of debt levels and leverage.
The debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio are uniformly reported as zero across all periods from September 2020 through June 2025. This indicates that Microsoft's liabilities are negligible or fully offset by its assets and equity, suggesting that the company operates without relying significantly on debt financing. Such a pattern underscores a conservatively financed capital structure, emphasizing equity financing without notable leverage.
In terms of financial leverage, the ratios provide additional insight into the company's capital structure dynamics. The financial leverage ratio has generally declined over the analyzed period, moving from approximately 2.44 in September 2020 to approximately 1.75 in June 2025. This decreasing trend implies a reduction in the company's use of financial leverage, further emphasizing a cautious approach to leverage financing. The ratios indicate that Microsoft's assets are financed predominantly through equity, with minimal to no dependence on debt.
Overall, Microsoft’s solvency analysis reveals a robust financial position characterized by an absence of leverage and a balanced or equity-heavy capital structure. This conservative approach reduces financial risk and enhances the company's ability to withstand economic fluctuations, underlining a strong and stable solvency profile.
Coverage ratios
| Jun 30, 2025 | Mar 31, 2025 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 52.84 | 48.86 | 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 |
The analysis of Microsoft Corporation's interest coverage ratios over the specified periods reveals a consistent and strengthening ability to meet interest obligations. Beginning from a ratio of 23.21 on September 30, 2020, the interest coverage steadily increased through successive periods, reaching a peak of approximately 52.84 by June 30, 2025. This upward trend indicates that Microsoft has experienced substantial improvements in earnings relative to interest expenses, reflecting enhanced profitability and financial stability.
The trend suggests that Microsoft’s operating income has grown at a pace that significantly exceeds its interest commitments, reducing the risk of default and enhancing its creditworthiness. The high and rising interest coverage ratios underscore robust earnings capacity, providing a substantial margin of safety for debt servicing. Even with some fluctuations in later periods, the ratios remain well above typical industry thresholds, signifying strong financial health.
Overall, the data depict a company progressively reinforcing its ability to cover interest expenses comfortably, which likely contributes positively to investor confidence and long-term financial resilience.