Microsoft Excel LibreOffice Calc

Microsoft Corp. (MSFT)


Analysis of Income Taxes

Advanced level


Accounting Policy on Income Taxes

Income tax expense includes U.S. and international income taxes, and interest and penalties on uncertain tax positions. Certain income and expenses are not reported in tax returns and financial statements in the same year. The tax effect of such temporary differences is reported as deferred income taxes. Deferred tax assets are reported net of a valuation allowance when it is more likely than not that a tax benefit will not be realized. All deferred income taxes are classified as long-term in Microsoft’s consolidated balance sheets.

Source: 10-K (filing date: 2019-08-01).


Income Tax Expense (Benefit)

Microsoft Corp., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015 Jun 30, 2014
U.S. federal 4,718  19,764  2,739  545  3,661  3,738 
U.S. state and local 662  934  30  136  364  266 
Foreign 5,531  4,348  2,472  1,940  2,065  2,073 
Current taxes 10,911  25,046  5,241  2,621  6,090  6,077 
U.S. federal (5,647) (4,292) —  —  —  — 
U.S. state and local (1,010) (458) —  —  —  — 
Foreign 194  (393) —  —  —  — 
Other —  —  (3,296) 332  224  (331)
Deferred taxes (6,463) (5,143) (3,296) 332  224  (331)
Provision for income taxes 4,448  19,903  1,945  2,953  6,314  5,746 

Based on: 10-K (filing date: 2019-08-01), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31).

Item Description The company
Current taxes Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Microsoft Corp.’s current taxes increased from 2017 to 2018 but then slightly decreased from 2018 to 2019 not reaching 2017 level.
Deferred taxes Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Microsoft Corp.’s deferred taxes decreased from 2017 to 2018 and from 2018 to 2019.
Provision for income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Microsoft Corp.’s provision for income taxes increased from 2017 to 2018 but then slightly decreased from 2018 to 2019 not reaching 2017 level.

Effective Income Tax Rate (EITR)

Microsoft Corp., effective income tax rate (EITR) reconciliation

Microsoft Excel LibreOffice Calc
Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015 Jun 30, 2014
Federal statutory tax rate 21.00% 28.10% 35.00% 35.00% 35.00% 35.00%
Foreign earnings taxed at lower rates -4.10% -7.80% -15.70% -19.40% -20.90% -17.10%
Phone business losses 0.00% 0.00% -7.30% 1.30% 19.10% 0.90%
Impact of intangible property transfers -5.90% 0.00% 0.00% 0.00% 0.00% 0.00%
Foreign-derived intangible income deduction -1.40% 0.00% 0.00% 0.00% 0.00% 0.00%
Research and development credit -1.10% -1.30% 0.00% 0.00% 0.00% 0.00%
Excess tax benefits relating to stock-based compensation -2.20% -2.50% -2.70% -2.00% 0.00% 0.00%
Domestic production activities deduction 0.00% 0.00% -1.40% -0.60% -2.40% -1.00%
Interest, net 1.00% 1.20% 1.80% 1.20% 1.50% 0.00%
Other reconciling items, net 2.50% -0.80% -1.30% -0.50% 1.80% 2.90%
Effective tax rate, before impact of the enactment of the TCJA 9.80% 16.90% 8.40% 15.00% 34.10% 20.70%
Impact of the enactment of the TCJA 0.40% 37.70% 0.00% 0.00% 0.00% 0.00%
Effective tax rate 10.20% 54.60% 8.40% 15.00% 34.10% 20.70%

Based on: 10-K (filing date: 2019-08-01), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31).

Item Description The company
Effective tax rate, before impact of the enactment of the TCJA Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Microsoft Corp.’s effective tax rate, before impact of the enactment of the TCJA increased from 2017 to 2018 but then slightly decreased from 2018 to 2019 not reaching 2017 level.

Components of Deferred Tax Assets and Liabilities

Microsoft Corp., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel LibreOffice Calc
Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015 Jun 30, 2014
Stock-based compensation expense 406  460  777  809  884  903 
Accruals, reserves, and other expenses 2,287  1,832  —  —  —  — 
Other expense items —  —  1,550  1,609  1,531  1,112 
Restructuring charges —  —  66  284  211  — 
Impaired investments —  —  59  226  257  209 
Loss and credit carryforwards 3,518  3,369  4,809  1,703  1,158  922 
Depreciation and amortization 7,046  351  53  115  798  — 
Leasing liabilities 1,594  —  —  —  —  — 
Unearned revenue 475  —  1,889  494  520  520 
Other 367  56  130  89  56  64 
Deferred income tax assets 15,693  6,068  9,333  5,329  5,415  3,730 
Valuation allowance (3,214) (3,186) (3,310) (2,180) (2,265) (903)
Deferred income tax assets, net of valuation allowance 12,479  2,882  6,023  3,149  3,150  2,827 
Foreign earnings —  —  (1,107) (1,242) (1,280) (1,140)
Unrealized gain on investments and debt (738) —  (1,384) (2,102) (2,223) (1,911)
Unearned revenue (30) (639) —  —  —  — 
Depreciation and amortization —  (1,103) (1,630) (1,008) (685) (470)
Leasing assets (1,510) —  —  —  —  — 
Deferred GILTI tax liabilities (2,607) (61) —  —  —  — 
Other (291) (251) (21) (54) (29) (87)
Deferred income tax liabilities (5,176) (2,054) (4,142) (4,406) (4,217) (3,608)
Net deferred income tax assets (liabilities) 7,303  828  1,881  (1,257) (1,067) (781)

Based on: 10-K (filing date: 2019-08-01), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31).

Item Description The company
Deferred income tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Microsoft Corp.’s deferred income tax assets decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.
Deferred income tax assets, net of valuation allowance Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Microsoft Corp.’s deferred income tax assets, net of valuation allowance decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.
Net deferred income tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Microsoft Corp.’s net deferred income tax assets (liabilities) decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.

Deferred Tax Assets and Liabilities, Classification

Microsoft Corp., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel LibreOffice Calc
Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015 Jun 30, 2014
Current deferred income tax assets —  —  —  —  1,915  1,941 
Current deferred income tax liabilities (included in Other current liabilities) —  —  —  —  211  125 
Long-term deferred income tax assets (included in Other long-term assets) 7,536  1,369  2,412  219  64  131 
Long-term deferred income tax liabilities 233  541  531  1,476  2,835  2,728 

Based on: 10-K (filing date: 2019-08-01), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31).

Item Description The company
Long-term deferred income tax assets (included in Other long-term assets) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Microsoft Corp.’s long-term deferred income tax assets (included in Other long-term assets) decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.
Long-term deferred income tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Microsoft Corp.’s long-term deferred income tax liabilities increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.

Adjustments to Financial Statements: Removal of Deferred Taxes

Microsoft Corp., adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015 Jun 30, 2014
Adjustment to Current Assets
Current assets (as reported) 175,552  169,662  159,851  139,660  124,712  114,246 
Less: Current deferred tax assets, net —  —  —  —  1,915  1,941 
Current assets (adjusted) 175,552  169,662  159,851  139,660  122,797  112,305 
Adjustment to Total Assets
Total assets (as reported) 286,556  258,848  241,086  193,694  176,223  172,384 
Less: Current deferred tax assets, net —  —  —  —  1,915  1,941 
Less: Noncurrent deferred tax assets, net 7,536  1,369  2,412  219  64  131 
Total assets (adjusted) 279,020  257,479  238,674  193,475  174,244  170,312 
Adjustment to Current Liabilities
Current liabilities (as reported) 69,420  58,488  64,527  59,357  49,858  45,625 
Less: Current deferred tax liabilities, net —  —  —  —  211  125 
Current liabilities (adjusted) 69,420  58,488  64,527  59,357  49,647  45,500 
Adjustment to Total Liabilities
Total liabilities (as reported) 184,226  176,130  168,692  121,697  96,140  82,600 
Less: Current deferred tax liabilities, net —  —  —  —  211  125 
Less: Noncurrent deferred tax liabilities, net 233  541  531  1,476  2,835  2,728 
Total liabilities (adjusted) 183,993  175,589  168,161  120,221  93,094  79,747 
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported) 102,330  82,718  72,394  71,997  80,083  89,784 
Less: Net deferred tax assets (liabilities) 7,303  828  1,881  (1,257) (1,067) (781)
Stockholders’ equity (adjusted) 95,027  81,890  70,513  73,254  81,150  90,565 
Adjustment to Net Income
Net income (as reported) 39,240  16,571  21,204  16,798  12,193  22,074 
Add: Deferred income tax expense (benefit) (6,463) (5,143) (3,296) 332  224  (331)
Net income (adjusted) 32,777  11,428  17,908  17,130  12,417  21,743 

Based on: 10-K (filing date: 2019-08-01), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31).


Microsoft Corp., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Microsoft Corp., adjusted financial ratios

Microsoft Excel LibreOffice Calc
Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015 Jun 30, 2014
Current Ratio
Reported current ratio 2.53 2.90 2.48 2.35 2.50 2.50
Adjusted current ratio 2.53 2.90 2.48 2.35 2.47 2.47
Net Profit Margin
Reported net profit margin 31.18% 15.02% 23.57% 19.69% 13.03% 25.42%
Adjusted net profit margin 26.05% 10.36% 19.91% 20.08% 13.27% 25.04%
Total Asset Turnover
Reported total asset turnover 0.44 0.43 0.37 0.44 0.53 0.50
Adjusted total asset turnover 0.45 0.43 0.38 0.44 0.54 0.51
Financial Leverage
Reported financial leverage 2.80 3.13 3.33 2.69 2.20 1.92
Adjusted financial leverage 2.94 3.14 3.38 2.64 2.15 1.88
Return on Equity (ROE)
Reported ROE 38.35% 20.03% 29.29% 23.33% 15.23% 24.59%
Adjusted ROE 34.49% 13.96% 25.40% 23.38% 15.30% 24.01%
Return on Assets (ROA)
Reported ROA 13.69% 6.40% 8.80% 8.67% 6.92% 12.81%
Adjusted ROA 11.75% 4.44% 7.50% 8.85% 7.13% 12.77%

Based on: 10-K (filing date: 2019-08-01), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31).

Financial ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Microsoft Corp.’s adjusted current ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Microsoft Corp.’s adjusted net profit margin ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Microsoft Corp.’s adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Microsoft Corp.’s adjusted financial leverage ratio decreased from 2017 to 2018 and from 2018 to 2019.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Microsoft Corp.’s adjusted ROE deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Microsoft Corp.’s adjusted ROA deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

Microsoft Corp., Financial Ratios: Reported vs. Adjusted


Adjusted Current Ratio

Microsoft Excel LibreOffice Calc
Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015 Jun 30, 2014
As Reported
Selected Financial Data (US$ in millions)
Current assets 175,552  169,662  159,851  139,660  124,712  114,246 
Current liabilities 69,420  58,488  64,527  59,357  49,858  45,625 
Liquidity Ratio
Current ratio1 2.53 2.90 2.48 2.35 2.50 2.50
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted current assets 175,552  169,662  159,851  139,660  122,797  112,305 
Adjusted current liabilities 69,420  58,488  64,527  59,357  49,647  45,500 
Liquidity Ratio
Adjusted current ratio2 2.53 2.90 2.48 2.35 2.47 2.47

Based on: 10-K (filing date: 2019-08-01), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31).

2019 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= 175,552 ÷ 69,420 = 2.53

2 Adjusted current ratio = Adjusted current assets ÷ Adjusted current liabilities
= 175,552 ÷ 69,420 = 2.53

Liquidity ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Microsoft Corp.’s adjusted current ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.

Adjusted Net Profit Margin

Microsoft Excel LibreOffice Calc
Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015 Jun 30, 2014
As Reported
Selected Financial Data (US$ in millions)
Net income 39,240  16,571  21,204  16,798  12,193  22,074 
Revenue 125,843  110,360  89,950  85,320  93,580  86,833 
Profitability Ratio
Net profit margin1 31.18% 15.02% 23.57% 19.69% 13.03% 25.42%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income 32,777  11,428  17,908  17,130  12,417  21,743 
Revenue 125,843  110,360  89,950  85,320  93,580  86,833 
Profitability Ratio
Adjusted net profit margin2 26.05% 10.36% 19.91% 20.08% 13.27% 25.04%

Based on: 10-K (filing date: 2019-08-01), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31).

2019 Calculations

1 Net profit margin = 100 × Net income ÷ Revenue
= 100 × 39,240 ÷ 125,843 = 31.18%

2 Adjusted net profit margin = 100 × Adjusted net income ÷ Revenue
= 100 × 32,777 ÷ 125,843 = 26.05%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Microsoft Corp.’s adjusted net profit margin ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015 Jun 30, 2014
As Reported
Selected Financial Data (US$ in millions)
Revenue 125,843  110,360  89,950  85,320  93,580  86,833 
Total assets 286,556  258,848  241,086  193,694  176,223  172,384 
Activity Ratio
Total asset turnover1 0.44 0.43 0.37 0.44 0.53 0.50
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Revenue 125,843  110,360  89,950  85,320  93,580  86,833 
Adjusted total assets 279,020  257,479  238,674  193,475  174,244  170,312 
Activity Ratio
Adjusted total asset turnover2 0.45 0.43 0.38 0.44 0.54 0.51

Based on: 10-K (filing date: 2019-08-01), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31).

2019 Calculations

1 Total asset turnover = Revenue ÷ Total assets
= 125,843 ÷ 286,556 = 0.44

2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 125,843 ÷ 279,020 = 0.45

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Microsoft Corp.’s adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015 Jun 30, 2014
As Reported
Selected Financial Data (US$ in millions)
Total assets 286,556  258,848  241,086  193,694  176,223  172,384 
Stockholders’ equity 102,330  82,718  72,394  71,997  80,083  89,784 
Solvency Ratio
Financial leverage1 2.80 3.13 3.33 2.69 2.20 1.92
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 279,020  257,479  238,674  193,475  174,244  170,312 
Adjusted stockholders’ equity 95,027  81,890  70,513  73,254  81,150  90,565 
Solvency Ratio
Adjusted financial leverage2 2.94 3.14 3.38 2.64 2.15 1.88

Based on: 10-K (filing date: 2019-08-01), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31).

2019 Calculations

1 Financial leverage = Total assets ÷ Stockholders’ equity
= 286,556 ÷ 102,330 = 2.80

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 279,020 ÷ 95,027 = 2.94

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Microsoft Corp.’s adjusted financial leverage ratio decreased from 2017 to 2018 and from 2018 to 2019.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015 Jun 30, 2014
As Reported
Selected Financial Data (US$ in millions)
Net income 39,240  16,571  21,204  16,798  12,193  22,074 
Stockholders’ equity 102,330  82,718  72,394  71,997  80,083  89,784 
Profitability Ratio
ROE1 38.35% 20.03% 29.29% 23.33% 15.23% 24.59%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income 32,777  11,428  17,908  17,130  12,417  21,743 
Adjusted stockholders’ equity 95,027  81,890  70,513  73,254  81,150  90,565 
Profitability Ratio
Adjusted ROE2 34.49% 13.96% 25.40% 23.38% 15.30% 24.01%

Based on: 10-K (filing date: 2019-08-01), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31).

2019 Calculations

1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 39,240 ÷ 102,330 = 38.35%

2 Adjusted ROE = 100 × Adjusted net income ÷ Adjusted stockholders’ equity
= 100 × 32,777 ÷ 95,027 = 34.49%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Microsoft Corp.’s adjusted ROE deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015 Jun 30, 2014
As Reported
Selected Financial Data (US$ in millions)
Net income 39,240  16,571  21,204  16,798  12,193  22,074 
Total assets 286,556  258,848  241,086  193,694  176,223  172,384 
Profitability Ratio
ROA1 13.69% 6.40% 8.80% 8.67% 6.92% 12.81%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income 32,777  11,428  17,908  17,130  12,417  21,743 
Adjusted total assets 279,020  257,479  238,674  193,475  174,244  170,312 
Profitability Ratio
Adjusted ROA2 11.75% 4.44% 7.50% 8.85% 7.13% 12.77%

Based on: 10-K (filing date: 2019-08-01), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31).

2019 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 39,240 ÷ 286,556 = 13.69%

2 Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 32,777 ÷ 279,020 = 11.75%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Microsoft Corp.’s adjusted ROA deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.