Stock Analysis on Net

Microsoft Corp. (NASDAQ:MSFT)

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Analysis of Operating Leases

Microsoft Excel

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Adjustments to Financial Statements for Operating Leases

Microsoft Corp., adjustments to financial statements

US$ in millions

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Adjustment to Total Assets
Total assets (as reported)
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)1
Total assets (adjusted)
Adjustment to Total Debt
Total debt (as reported)
Add: Operating lease liability (before adoption of FASB Topic 842)2
Add: Operating lease liabilities (included in Other current liabilities)
Add: Long-term operating lease liabilities
Total debt (adjusted)

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

1, 2 Equal to total present value of future operating lease payments.


Microsoft Corp., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios for Operating Leases (Summary)

Microsoft Corp., adjusted financial ratios

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Total Asset Turnover1
Reported total asset turnover
Adjusted total asset turnover
Debt to Equity2
Reported debt to equity
Adjusted debt to equity
Return on Assets3 (ROA)
Reported ROA
Adjusted ROA

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Microsoft Corp. adjusted total asset turnover ratio improved from 2020 to 2021 and from 2021 to 2022.
Adjusted debt to equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Microsoft Corp. adjusted debt to equity ratio improved from 2020 to 2021 and from 2021 to 2022.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Microsoft Corp. adjusted ROA improved from 2020 to 2021 and from 2021 to 2022.

Microsoft Corp., Financial Ratios: Reported vs. Adjusted


Adjusted Total Asset Turnover

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
As Reported
Selected Financial Data (US$ in millions)
Revenue
Total assets
Activity Ratio
Total asset turnover1
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Revenue
Adjusted total assets
Activity Ratio
Adjusted total asset turnover2

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

2022 Calculations

1 Total asset turnover = Revenue ÷ Total assets
= ÷ =

2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= ÷ =

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Microsoft Corp. adjusted total asset turnover ratio improved from 2020 to 2021 and from 2021 to 2022.

Adjusted Debt to Equity

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
As Reported
Selected Financial Data (US$ in millions)
Total debt
Stockholders’ equity
Solvency Ratio
Debt to equity1
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt
Stockholders’ equity
Solvency Ratio
Adjusted debt to equity2

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

2022 Calculations

1 Debt to equity = Total debt ÷ Stockholders’ equity
= ÷ =

2 Adjusted debt to equity = Adjusted total debt ÷ Stockholders’ equity
= ÷ =

Solvency ratio Description The company
Adjusted debt-to-equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Microsoft Corp. adjusted debt-to-equity ratio improved from 2020 to 2021 and from 2021 to 2022.

Adjusted Return on Assets (ROA)

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income
Total assets
Profitability Ratio
ROA1
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net income
Adjusted total assets
Profitability Ratio
Adjusted ROA2

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

2022 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =

2 Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Microsoft Corp. adjusted ROA improved from 2020 to 2021 and from 2021 to 2022.