Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
Quarterly Data
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Microsoft Corp., common-size consolidated balance sheet: liabilities and stockholders’ equity (quarterly data)
Based on: 10-Q (reporting date: 2026-03-31), 10-Q (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-K (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30).
A fundamental shift in the capital structure is observed over the analyzed period, characterized by a systemic transition from a liability-funded balance sheet to one predominantly financed by equity. Total liabilities decreased from 61.98% of total liabilities and stockholders’ equity in September 2019 to 40.31% by March 2026. Conversely, stockholders’ equity expanded from 38.02% to 59.69% during the same timeframe, indicating a significant strengthening of the solvency position and a reduced reliance on external borrowing.
- Debt Reduction and Deleveraging
- A pronounced downward trend is evident in long-term debt, excluding the current portion, which fell from 23.83% in September 2019 to 4.53% by March 2026. This aggressive deleveraging is a primary driver behind the overall reduction in total liabilities. Short-term debt remained largely absent for most of the period, with a temporary spike appearing between September 2023 and March 2024, peaking at 5.79% before returning to negligible levels.
- Equity Growth and Retained Earnings
- The growth in stockholders’ equity is primarily attributed to a substantial increase in retained earnings, which rose from 9.77% in September 2019 to 43.58% by March 2026. This suggests strong internal capital generation and a consistent policy of reinvesting profits. Meanwhile, common stock and paid-in capital declined as a percentage of the total, moving from 28.28% to 16.58%, reflecting the diminishing relative weight of original contributed capital as accumulated earnings became the dominant equity component.
- Current Liability Dynamics
- Current liabilities remained relatively stable, fluctuating between approximately 19% and 28%, ending at 19.69% in March 2026. Short-term unearned revenue, a significant component of current liabilities, exhibited a general decline from 10.72% in September 2019 to 7.34% by March 2026, despite periodic quarterly fluctuations. Accounts payable showed a gradual increase in its relative weight, rising from 3.07% to 5.40%, suggesting a slight increase in reliance on trade credit relative to the total balance sheet size.
- Long-term Operating Obligations
- While financial debt decreased, other long-term liabilities exhibited a steady increase, rising from 3.16% in September 2019 to 8.86% by March 2026. Additionally, long-term income taxes showed a consistent downward trend, falling from 10.20% to 4.02%. Long-term operating lease liabilities remained relatively flat, hovering between 2.41% and 3.30%, indicating a stable footprint in leased assets relative to total capitalization.
Overall, the data reflects a strategic pivot toward a more conservative financial posture. The substantial growth in retained earnings, coupled with the sharp reduction in long-term debt, indicates a transition toward self-sufficiency and a significant reduction in financial risk.