Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Microsoft Corp. (NASDAQ:MSFT)

Analysis of Property, Plant and Equipment

Advanced level

Property, Plant and Equipment Disclosure

Microsoft Corp., balance sheet: property, plant and equipment

US$ in millions

Microsoft Excel LibreOffice Calc
Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Land 1,823  1,540  1,254  1,107  824  769 
Buildings and improvements 33,995  26,288  20,604  16,284  12,393  10,800 
Leasehold improvements 5,487  5,316  4,735  5,064  3,659  3,577 
Computer equipment and software 41,261  33,823  27,633  21,414  17,391  13,612 
Furniture and equipment 4,782  4,840  4,457  4,044  3,889  3,579 
Property and equipment, at cost 87,348  71,807  58,683  47,913  38,156  32,337 
Accumulated depreciation (43,197) (35,330) (29,223) (24,179) (19,800) (17,606)
Property and equipment, net 44,151  36,477  29,460  23,734  18,356  14,731 

Based on: 10-K (filing date: 2020-07-31), 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).

Item Description The company
Property and equipment, at cost Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Microsoft Corp.’s property and equipment, at cost increased from 2018 to 2019 and from 2019 to 2020.
Property and equipment, net Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Microsoft Corp.’s property and equipment, net increased from 2018 to 2019 and from 2019 to 2020.

Asset Age Ratios (Summary)

Microsoft Corp., asset age ratios

Microsoft Excel LibreOffice Calc
Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Average age ratio 50.51% 50.28% 50.89% 51.66% 53.04% 55.77%
Estimated total useful life (years) 8 7 7 8 8 8
Estimated age, time elapsed since purchase (years) 4 4 4 4 4 4
Estimated remaining life (years) 4 4 4 4 4 3

Based on: 10-K (filing date: 2020-07-31), 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).

Asset age ratio Description The company
Average age ratio As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. Microsoft Corp.’s average age ratio of depreciable property, plant and equipment improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.
Estimated total useful life Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. Microsoft Corp.’s estimated total useful life of depreciable property, plant and equipment decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. Microsoft Corp.’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.
Estimated remaining life Microsoft Corp.’s estimated remaining life of depreciable property, plant and equipment decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.

Average Age

Microsoft Excel LibreOffice Calc
Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Selected Financial Data (US$ in millions)
Accumulated depreciation 43,197  35,330  29,223  24,179  19,800  17,606 
Property and equipment, at cost 87,348  71,807  58,683  47,913  38,156  32,337 
Land 1,823  1,540  1,254  1,107  824  769 
Asset Age Ratio
Average age1 50.51% 50.28% 50.89% 51.66% 53.04% 55.77%

Based on: 10-K (filing date: 2020-07-31), 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).

2020 Calculations

1 Average age = 100 × Accumulated depreciation ÷ (Property and equipment, at cost – Land)
= 100 × 43,197 ÷ (87,3481,823) = 50.51%

Asset age ratio Description The company
Average age As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. Microsoft Corp.’s average age ratio of depreciable property, plant and equipment improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.

Estimated Total Useful Life

Microsoft Excel LibreOffice Calc
Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Selected Financial Data (US$ in millions)
Property and equipment, at cost 87,348  71,807  58,683  47,913  38,156  32,337 
Land 1,823  1,540  1,254  1,107  824  769 
Depreciation expense 10,700  9,700  7,700  6,100  4,900  4,100 
Asset Age Ratio (Years)
Estimated total useful life1 8 7 7 8 8 8

Based on: 10-K (filing date: 2020-07-31), 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).

2020 Calculations

1 Estimated total useful life = (Property and equipment, at cost – Land) ÷ Depreciation expense
= (87,3481,823) ÷ 10,700 = 8

Asset age ratio Description The company
Estimated total useful life Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. Microsoft Corp.’s estimated total useful life of depreciable property, plant and equipment decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.

Estimated Age, Time Elapsed since Purchase

Microsoft Excel LibreOffice Calc
Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Selected Financial Data (US$ in millions)
Accumulated depreciation 43,197  35,330  29,223  24,179  19,800  17,606 
Depreciation expense 10,700  9,700  7,700  6,100  4,900  4,100 
Asset Age Ratio (Years)
Time elapsed since purchase1 4 4 4 4 4 4

Based on: 10-K (filing date: 2020-07-31), 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).

2020 Calculations

1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= 43,197 ÷ 10,700 = 4

Asset age ratio Description The company
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. Microsoft Corp.’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Estimated Remaining Life

Microsoft Excel LibreOffice Calc
Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Selected Financial Data (US$ in millions)
Property and equipment, net 44,151  36,477  29,460  23,734  18,356  14,731 
Land 1,823  1,540  1,254  1,107  824  769 
Depreciation expense 10,700  9,700  7,700  6,100  4,900  4,100 
Asset Age Ratio (Years)
Estimated remaining life1 4 4 4 4 4 3

Based on: 10-K (filing date: 2020-07-31), 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).

2020 Calculations

1 Estimated remaining life = (Property and equipment, net – Land) ÷ Depreciation expense
= (44,1511,823) ÷ 10,700 = 4

Asset age ratio Description The company
Estimated remaining life Microsoft Corp.’s estimated remaining life of depreciable property, plant and equipment decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.