Microsoft Corp. (NASDAQ:MSFT)

Land

The value of land has shown a consistent upward trend from 2019 to 2024, increasing from $1,540 million to $8,163 million. The growth rate accelerated notably after 2022, indicating significant acquisitions or revaluations in the recent years.

Buildings and improvements

Buildings and improvements exhibit steady and strong growth over the six-year period. Starting at $26,288 million in 2019, the amount increased to $93,943 million by 2024, almost quadrupling. This trend suggests sustained investment in infrastructure and facilities expansion.

Leasehold improvements

Investment in leasehold improvements increased gradually from $5,316 million in 2019 to $9,594 million in 2024. The growth is steady but at a slower pace compared to other asset categories, reflecting ongoing but moderate enhancements to leased properties.

Computer equipment and software

This category shows a strong upward trajectory, starting at $33,823 million in 2019 and reaching $93,780 million in 2024. The near tripling of value reflects substantial investment in technology infrastructure, highlighting the importance of digital assets.

Furniture and equipment

Furniture and equipment values increased modestly from $4,840 million in 2019 to $6,532 million in 2024. Growth is consistent but relatively small, indicating a limited scale of investment or replacement in this asset class.

Property and equipment, at cost

The total property and equipment recorded at cost demonstrated strong expansion, rising from $71,807 million in 2019 to $212,012 million in 2024. This significant growth underscores overall capital expenditure and asset base expansion.

Accumulated depreciation

Accumulated depreciation increased in magnitude from -$35,330 million in 2019 to -$76,421 million in 2024. The growing depreciation suggests an aging asset base and consistent allocation of depreciation expense over time.

Property and equipment, net

Net property and equipment values have increased markedly from $36,477 million in 2019 to $135,591 million in 2024. The increase reflects both the continued investment in property, plant, and equipment and the ongoing impact of depreciation. The net asset growth is substantial, indicating expanded operational capacity and asset reinvestment.

Average Age Ratio

The average age ratio exhibits a consistent downward trend over the examined period, decreasing from 50.28% in mid-2019 to 37.49% in mid-2024. This indicates a younger property, plant, and equipment (PPE) portfolio over time, suggesting either recent acquisitions or accelerated replacement of older assets.

Estimated Total Useful Life

The estimated total useful life of assets shows variability, starting at 7 years in mid-2019, peaking at 14 years in mid-2023, and slightly declining to 13 years in mid-2024. This fluctuation suggests changes in asset mix or adjustments in management’s expectations regarding asset longevity.

Estimated Age (Time Elapsed Since Purchase)

The estimated age fluctuates between 4 to 6 years across the years, specifically rising from 4 years in 2019 to 6 years in 2021 and 2023, then slightly decreasing back to 5 years in 2024. This pattern reflects asset acquisition timing and replacement cycles, indicating intermittent renewal activity rather than a steady decline in asset age.

Estimated Remaining Life

The estimated remaining life of assets trends upward, from 4 years in 2019 and 2020 to 8 years in mid-2023 and 2024. This increase aligns with the rise in total estimated useful life and suggests prolongation of asset utility, possibly due to incorporation of longer-lived assets or extending the expected service life through maintenance or improvements.

The financial data for property, plant, and equipment over the analyzed years exhibits clear upward trends in accounting balances, alongside notable shifts in asset aging.

Property and Equipment, at Cost

The recorded value of property and equipment steadily increased each year, rising from approximately $71.8 billion in mid-2019 to $212.0 billion by mid-2024. This represents almost a threefold increase in gross asset value over the five-year period, indicating significant investment in capital assets.

Accumulated Depreciation

Accumulated depreciation also followed a rising trajectory, increasing from $35.3 billion in mid-2019 to $76.4 billion in mid-2024. Although this balance exhibited growth, the pace of increase is more moderate relative to the growth in the cost base of property and equipment. This pattern is consistent with ongoing capital expenditures coupled with regular depreciation charges on existing assets.

Land

The value of land owned expanded substantially, rising from $1.5 billion in mid-2019 to $8.2 billion in mid-2024. This marked increase suggests active acquisitions or reclassification of land assets over time, contributing notably to the expansion of the overall property portfolio.

Average Age Ratio

The average age ratio of the property and equipment, expressed as a percentage, showed a continuous decline from 50.28% in mid-2019 to 37.49% in mid-2024. This downward trend suggests that the asset base is becoming younger over time, likely the result of accelerated acquisitions of new assets and/or disposals of older equipment. The reduction in average age indicates a refreshed and potentially more technologically current fixed asset base.

In summary, the data reveals a period of robust capital reinvestment with expanding asset holdings, particularly in land, accompanied by a gradual rejuvenation of the asset portfolio. The combined trends of increasing cost and accumulated depreciation, alongside decreasing average age, reflect an active capital asset management strategy aimed at maintaining and growing productive capacity while modernizing the asset base.

Property and Equipment, at Cost

The value of property and equipment at cost demonstrates a consistent upward trend across the periods analyzed. Starting from approximately 71.8 billion US dollars in mid-2019, the figure rises steadily each year, reaching about 212.0 billion US dollars by mid-2024. This indicates significant ongoing investments in physical assets over the six-year span, with the most substantial annual increases occurring in the later years (notably between 2022 and 2024).

Land

The land asset value similarly shows continuous growth, increasing from 1.54 billion US dollars in mid-2019 to 8.16 billion US dollars in mid-2024. This represents more than a fivefold increase over six years, highlighting significant acquisitions or revaluation of land holdings.

Depreciation Expense

Depreciation expense reflects some volatility across the periods. Initially rising from 9.7 billion US dollars in mid-2019 to 10.7 billion in mid-2020, it declined to 9.3 billion in mid-2021. This fluctuation may indicate changes in asset base composition or revised depreciation policies. After mid-2021, the expense increased again, peaking at 15.2 billion US dollars in mid-2024. The upward trend in the later years corresponds with the increase in property and equipment values, suggesting accelerated depreciation on newer or more valuable assets.

Estimated Total Useful Life

The estimated total useful life of the assets exhibits variability rather than a stable trend. Beginning at 7 years in mid-2019, the value fluctuates between 8 and 14 years, ending at 13 years in mid-2024. This variation might reflect changes in asset composition, improvements in asset durability, or adjustments in accounting estimates for depreciation schedules.

Accumulated Depreciation

The accumulated depreciation has exhibited a consistent upward trend over the six-year period. Starting from 35,330 million US dollars in mid-2019, it increased steadily each year, reaching 76,421 million US dollars by mid-2024. This rising trend indicates ongoing asset aging and continued wear and tear on property, plant, and equipment (PP&E).

Depreciation Expense

The annual depreciation expense shows variability across the years. It initially increased from 9,700 million US dollars in 2019 to 10,700 million in 2020, then decreased to 9,300 million in 2021. Afterward, it rose again to 12,600 million in 2022, dropped slightly to 11,000 million in 2023, before peaking at 15,200 million in 2024. This fluctuation could reflect changes in asset additions or disposals, variations in depreciation methods, or updates in asset useful life estimates.

Time Elapsed Since Purchase

The time elapsed since purchase ranges narrowly between 4 and 6 years. The value remained at 4 years in 2019 and 2020, rose to 6 years in 2021, decreased to 5 years in 2022, returned to 6 years in 2023, and settled again at 5 years in 2024. This indicates that the asset base includes a mix of relatively recent to moderately aged assets, suggesting continuous investment in new PP&E alongside retention of existing assets.

Overall Insights

The combined increase in accumulated depreciation and the fluctuating but generally rising depreciation expense suggest active asset management with ongoing investments and asset retirements. The relatively stable elapsed time since purchase highlights a balanced asset turnover pattern. The peak in depreciation expense in 2024 may indicate a significant asset acquisition or a change in depreciation policy during that period, contributing to higher expense recognition.

Property and Equipment, Net

The net value of property and equipment shows a consistent and significant upward trend over the examined periods. Starting from approximately $36.5 billion in mid-2019, it increased steadily each year, reaching about $135.6 billion by mid-2024. This represents a nearly fourfold increase over five years, indicating a substantial investment in long-term assets.

Land

The value attributed to land follows a similar increasing pattern. From $1.54 billion in 2019, the reported value more than quintupled, reaching over $8.16 billion by 2024. The growth in land value appears consistent, with notable acceleration especially between mid-2022 and mid-2024.

Depreciation Expense

Depreciation expense shows more variability but an overall increasing trend. Beginning at $9.7 billion in 2019 and rising to $15.2 billion by 2024, it fluctuates somewhat year-on-year. The expense notably decreased from 2020 to 2021, but then increased again, peaking in 2024. This pattern may correspond with timing of asset acquisitions or changes in depreciation methods.

Estimated Remaining Life of Property and Equipment

The estimated remaining life reported increased from 4 years in the 2019 and 2020 periods to 6 years in 2021 and 2022, further extending to 8 years in 2023 and 2024. This suggests that newer assets with longer useful lives are being added to the asset base or reassessments of asset life have occurred, potentially reflecting a strategic shift toward longer-lived property and equipment.

Overall Insights

The data reveals a strategic and consistent expansion of the property and equipment base over the five-year span, supported by escalating land values and increasing asset lives. The upward trend in depreciation expense correlates with asset growth but includes fluctuations possibly tied to asset acquisition timing or accounting adjustments. The lengthening estimated remaining asset life may indicate investments in assets expected to provide value over extended periods, reflecting a long-term growth orientation.