Microsoft Corp., adjustment to net income

US$ in millions

12 months ended:	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
Net income (as reported)	72,361)	72,738)	61,271)	44,281)	39,240)	16,571)
Add: Net change related to investments	(1,444)	(5,360)	(2,266)	3,990)	2,405)	(2,717)
Net income (adjusted)	70,917)	67,378)	59,005)	48,271)	41,645)	13,854)

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Microsoft Corp., adjusted profitability ratios

	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
Net Profit Margin
Reported net profit margin	34.15%	36.69%	36.45%	30.96%	31.18%	15.02%
Adjusted net profit margin	33.46%	33.98%	35.10%	33.75%	33.09%	12.55%
Return on Equity (ROE)
Reported ROE	35.09%	43.68%	43.15%	37.43%	38.35%	20.03%
Adjusted ROE	34.39%	40.46%	41.56%	40.80%	40.70%	16.75%
Return on Assets (ROA)
Reported ROA	17.56%	19.94%	18.36%	14.70%	13.69%	6.40%
Adjusted ROA	17.21%	18.47%	17.68%	16.02%	14.53%	5.35%

Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	Microsoft Corp. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by shareholders’ equity.	Microsoft Corp. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by total assets.	Microsoft Corp. adjusted ROA improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

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	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	72,361)	72,738)	61,271)	44,281)	39,240)	16,571)
Revenue	211,915)	198,270)	168,088)	143,015)	125,843)	110,360)
Profitability Ratio
Net profit margin¹	34.15%	36.69%	36.45%	30.96%	31.18%	15.02%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income	70,917)	67,378)	59,005)	48,271)	41,645)	13,854)
Revenue	211,915)	198,270)	168,088)	143,015)	125,843)	110,360)
Profitability Ratio
Adjusted net profit margin²	33.46%	33.98%	35.10%	33.75%	33.09%	12.55%

2023 Calculations

¹ Net profit margin = 100 × Net income ÷ Revenue
= 100 × 72,361 ÷ 211,915 = 34.15%

² Adjusted net profit margin = 100 × Adjusted net income ÷ Revenue
= 100 × 70,917 ÷ 211,915 = 33.46%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	Microsoft Corp. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	72,361)	72,738)	61,271)	44,281)	39,240)	16,571)
Stockholders’ equity	206,223)	166,542)	141,988)	118,304)	102,330)	82,718)
Profitability Ratio
ROE¹	35.09%	43.68%	43.15%	37.43%	38.35%	20.03%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income	70,917)	67,378)	59,005)	48,271)	41,645)	13,854)
Stockholders’ equity	206,223)	166,542)	141,988)	118,304)	102,330)	82,718)
Profitability Ratio
Adjusted ROE²	34.39%	40.46%	41.56%	40.80%	40.70%	16.75%

2023 Calculations

¹ ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 72,361 ÷ 206,223 = 35.09%

² Adjusted ROE = 100 × Adjusted net income ÷ Stockholders’ equity
= 100 × 70,917 ÷ 206,223 = 34.39%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by shareholders’ equity.	Microsoft Corp. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.

	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	72,361)	72,738)	61,271)	44,281)	39,240)	16,571)
Total assets	411,976)	364,840)	333,779)	301,311)	286,556)	258,848)
Profitability Ratio
ROA¹	17.56%	19.94%	18.36%	14.70%	13.69%	6.40%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income	70,917)	67,378)	59,005)	48,271)	41,645)	13,854)
Total assets	411,976)	364,840)	333,779)	301,311)	286,556)	258,848)
Profitability Ratio
Adjusted ROA²	17.21%	18.47%	17.68%	16.02%	14.53%	5.35%

2023 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 72,361 ÷ 411,976 = 17.56%

² Adjusted ROA = 100 × Adjusted net income ÷ Total assets
= 100 × 70,917 ÷ 411,976 = 17.21%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by total assets.	Microsoft Corp. adjusted ROA improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Microsoft Corp. (NASDAQ:MSFT)

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