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Microsoft Corp. (NASDAQ:MSFT)

Common-Size Balance Sheet: Liabilities and Stockholders’ Equity

Microsoft Corp., common-size consolidated balance sheet: liabilities and stockholders’ equity

Microsoft Excel
Jun 30, 2026 Jun 30, 2025 Jun 30, 2024 Jun 30, 2023 Jun 30, 2022 Jun 30, 2021
Accounts payable 5.59 4.48 4.29 4.39 5.21 4.54
Short-term debt 0.00 0.00 1.31 0.00 0.00 0.00
Current portion of long-term debt 1.22 0.48 0.44 1.27 0.75 2.42
Accrued compensation 1.97 2.21 2.45 2.67 2.92 3.01
Short-term income taxes 0.33 1.16 0.98 1.01 1.11 0.65
Short-term unearned revenue 9.62 10.43 11.24 12.36 12.48 12.44
Current finance lease liabilities 0.57 0.51 0.46 0.29 0.29 0.24
Other current liabilities 2.96 3.53 3.29 3.29 3.29 3.26
Current liabilities 22.26% 22.81% 24.46% 25.28% 26.06% 26.56%
Long-term debt, excluding current portion 4.10 6.49 8.33 10.19 12.89 15.00
Long-term income taxes 3.78 4.20 5.45 6.20 7.15 8.15
Long-term unearned revenue 0.36 0.44 0.51 0.71 0.79 0.78
Deferred income taxes 0.40 0.46 0.51 0.11 0.06 0.06
Long-term operating lease liabilities 2.18 2.82 3.03 3.09 3.15 2.88
Long-term finance lease liabilities 8.22 6.95 4.84 3.85 3.79 3.52
Other long-term liabilities 0.37 0.35 0.44 0.51 0.46 0.50
Long-term liabilities 19.41% 21.70% 23.12% 24.66% 28.29% 30.90%
Total liabilities 41.67% 44.51% 47.58% 49.94% 54.35% 57.46%
Common stock and paid-in capital 15.48 17.62 19.71 22.75 23.83 24.90
Retained earnings 43.29 38.41 33.81 28.85 23.10 17.09
Accumulated other comprehensive income (loss) -0.43 -0.54 -1.09 -1.54 -1.28 0.55
Stockholders’ equity 58.33% 55.49% 52.42% 50.06% 45.65% 42.54%
Total liabilities and stockholders’ equity 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Based on: 10-K (reporting date: 2026-06-30), 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).

The capital structure exhibits a consistent shift from liability-based financing toward equity-based financing over the observed period. Total liabilities have decreased steadily from 57.46% in 2021 to 41.67% in 2026, while stockholders' equity has expanded from 42.54% to 58.33% of the total balance sheet. This trajectory indicates a strengthening of the solvency position and a reduction in overall financial leverage.

Liability Composition and Trends
Current liabilities show a gradual contraction, moving from 26.56% to 22.26%. A primary driver of this decline is the reduction in short-term unearned revenue, which fell from 12.44% to 9.62%. Long-term liabilities experienced a more pronounced decrease, dropping from 30.90% to 19.41%. This is largely attributed to a significant reduction in long-term debt, which fell from 15.00% to 4.10%.
Conversely, long-term finance lease liabilities have trended upward, increasing from 3.52% in 2021 to 8.22% in 2026, suggesting a strategic shift toward leasing arrangements for long-term assets.
Equity Component Evolution
The composition of stockholders' equity has undergone a substantial transformation. Retained earnings have grown aggressively, increasing from 17.09% to 43.29% of total liabilities and stockholders' equity. This suggests strong internal capital generation and profit retention.
Simultaneously, common stock and paid-in capital have decreased from 24.90% to 15.48%, indicating that earned capital is becoming the dominant driver of the equity base over contributed capital. Accumulated other comprehensive income remained negative for most of the period, though it showed a recovery trend from a low of -1.54% in 2023 to -0.43% by 2026.

The overall financial profile is characterized by a deliberate deleveraging process and a transition toward an organically funded balance sheet. The marked increase in retained earnings relative to the decrease in long-term debt underscores a transition toward higher financial autonomy and lower reliance on external creditors.

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