Analysis of Debt
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Total Debt (Carrying Amount)
Microsoft Corp., balance sheet: debt
US$ in millions
Based on: 10-K (reporting date: 2026-06-30), 10-K (reporting date: 2025-06-30), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30).
Total debt and finance lease liabilities exhibited a U-shaped trajectory over the analyzed period. After a period of contraction between June 30, 2021, and June 30, 2023, where obligations decreased from US$ 70,687 million to US$ 64,304 million, there is a pronounced and accelerating upward trend. By June 30, 2026, total liabilities reached US$ 106,888 million, marking a significant expansion of the balance sheet's debt obligations.
- Long-Term Debt Composition
- Long-term debt, excluding the current portion, demonstrates a steady downward trend, declining from US$ 50,074 million in 2021 to US$ 31,067 million by 2026. This indicates a consistent reduction in traditional long-term borrowing over the six-year period.
- Expansion of Finance Lease Liabilities
- The primary driver of the increase in total debt is the rapid growth of finance lease liabilities. Long-term finance lease liabilities grew from US$ 11,750 million in 2021 to US$ 62,304 million in 2026. Similarly, current finance lease liabilities increased from US$ 791 million to US$ 4,290 million, signaling a strategic shift toward lease-based financing for assets.
- Short-Term Debt and Current Obligations
- Current liabilities show increased volatility and growth toward the end of the period. The current portion of long-term debt peaked at US$ 9,227 million in 2026. Furthermore, the appearance of short-term debt in 2024 at US$ 6,693 million suggests a change in the short-term funding strategy or a restructuring of debt maturities.
Total Debt (Fair Value)
| Jun 30, 2026 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Short-term debt | |
| Long-term debt, including current portion | |
| Finance lease liabilities | |
| Total debt and finance lease liabilities (fair value) | |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | |
Based on: 10-K (reporting date: 2026-06-30).
Weighted-average Interest Rate on Debt
Weighted average effective interest rate on debt and finance lease liabilities:
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| Total | |||
Based on: 10-K (reporting date: 2026-06-30).
1 US$ in millions
2 Weighted-average interest rate = 100 × ÷ =