Stock Analysis on Net
Stock Analysis on Net

Microsoft Corp. (NASDAQ:MSFT)

Common-Size Balance Sheet: Assets 

Microsoft Corp., common-size consolidated balance sheet: assets

Microsoft Excel
Jun 30, 2025 Jun 30, 2024 Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020
Cash and cash equivalents 4.89 3.58 8.42 3.82 4.26 4.51
Short-term investments 10.39 11.17 18.58 24.89 34.79 40.81
Cash, cash equivalents, and short-term investments 15.28% 14.75% 27.01% 28.71% 39.05% 45.31%
Accounts receivable, net of allowance for doubtful accounts 11.29 11.11 11.82 12.13 11.40 10.62
Inventories 0.15 0.24 0.61 1.03 0.79 0.63
Other current assets 4.16 5.08 5.29 4.64 4.01 3.81
Current assets 30.88% 31.19% 44.73% 46.51% 55.25% 60.37%
Property and equipment, net of accumulated depreciation 33.11 26.47 23.22 20.39 17.89 14.65
Operating lease right-of-use assets 4.01 3.70 3.48 3.60 3.32 2.90
Equity and other investments 2.49 2.85 2.40 1.89 1.79 0.98
Goodwill 19.31 23.28 16.48 18.51 14.89 14.39
Intangible assets, net 3.65 5.39 2.27 3.10 2.34 2.34
Other long-term assets 6.55 7.12 7.43 6.00 4.52 4.36
Long-term assets 69.12% 68.81% 55.27% 53.49% 44.75% 39.63%
Total assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Based on: 10-K (reporting date: 2025-06-30), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30).

Liquidity and Current Asset Composition
There is a noticeable decrease in the combined cash, cash equivalents, and short-term investments as a percentage of total assets from 45.31% in mid-2020 to 15.28% in mid-2025. This decline is primarily driven by a significant reduction in short-term investments, which decreased from 40.81% to 10.39% over the same period. Cash and cash equivalents show fluctuations, peaking at 8.42% in mid-2023 before dropping again.
Accounts receivable remain relatively stable between 10.62% and 12.13% of total assets, indicating consistent credit sales or collection policies. Inventories are low throughout and decline from 0.63% in 2020 to 0.15% in 2025, suggesting a minimal emphasis on inventory or efficient inventory management. Other current assets slightly increase initially but then decline towards the end, stabilizing around 4.16% in 2025.
Overall, current assets as a portion of total assets contract substantially from 60.37% in 2020 to 30.88% in 2025, reflecting a strategic shift away from short-term assets.
Long-term Asset Structure
Long-term assets grow significantly from 39.63% of total assets in 2020 to 69.12% in 2025, indicating increasing investment or capitalization in long-term resources.
Property and equipment show the most marked rise, nearly doubling from 14.65% to 33.11%, signifying enhanced investment in physical corporate infrastructure or fixed assets.
Operating lease right-of-use assets steadily rise from 2.9% to 4.01%, consistent with either additional leasing activity or reclassification impacts.
Equity and other investments exhibit modest growth, peaking at 2.85% in 2024 before slightly decreasing, maintaining a minor portion of total assets.
Goodwill fluctuates, rising notably to 23.28% in 2024 before declining to 19.31% in 2025, denoting either acquisitions or impairment adjustments over time.
Intangible assets net also within this category increase overall but show variability, peaking at 5.39% in 2024 before dropping to 3.65% in 2025.
Other long-term assets consistently grow until 2023 then slightly reduce, maintaining around 6.55% towards the end of the period.
Summary and Insights
The company appears to be transitioning from a portfolio heavily weighted towards liquid and short-term investments to one more invested in long-term physical and intangible assets. This strategic realignment may suggest a focus on strengthening operational capacity, potentially through capital expenditures or strategic acquisitions as indicated by changes in property, equipment, goodwill, and intangible assets.
The reduction in short-term investments could indicate utilization of these funds for long-term asset accumulation or other corporate purposes.
Current assets' sharp decline as a proportion of total assets suggests a reduced liquidity buffer, which could affect short-term financial flexibility but possibly improve return on assets if long-term investments yield adequate returns.