Stock Analysis on Net
Stock Analysis on Net

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, 2025 Jun 30, 2024 Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020
Accounts payable 4.48 4.29 4.39 5.21 4.54 4.16
Short-term debt 0.00 1.31 0.00 0.00 0.00 0.00
Current portion of long-term debt 0.48 0.44 1.27 0.75 2.42 1.24
Accrued compensation 2.21 2.45 2.67 2.92 3.01 2.61
Short-term income taxes 1.16 0.98 1.01 1.11 0.65 0.71
Short-term unearned revenue 10.43 11.24 12.36 12.48 12.44 11.95
Current finance lease liabilities 0.51 0.46 0.29 0.29 0.24 0.18
Other current liabilities 3.53 3.29 3.29 3.29 3.26 3.15
Current liabilities 22.81% 24.46% 25.28% 26.06% 26.56% 24.00%
Long-term debt, excluding current portion 6.49 8.33 10.19 12.89 15.00 19.77
Long-term income taxes 4.20 5.45 6.20 7.15 8.15 9.77
Long-term unearned revenue 0.44 0.51 0.71 0.79 0.78 1.06
Deferred income taxes 0.46 0.51 0.11 0.06 0.06 0.07
Long-term operating lease liabilities 2.82 3.03 3.09 3.15 2.88 2.55
Long-term finance lease liabilities 6.95 4.84 3.85 3.79 3.52 2.97
Other long-term liabilities 0.35 0.44 0.51 0.46 0.50 0.56
Long-term liabilities 21.70% 23.12% 24.66% 28.29% 30.90% 36.74%
Total liabilities 44.51% 47.58% 49.94% 54.35% 57.46% 60.74%
Common stock and paid-in capital 17.62 19.71 22.75 23.83 24.90 26.73
Retained earnings 38.41 33.81 28.85 23.10 17.09 11.47
Accumulated other comprehensive income (loss) -0.54 -1.09 -1.54 -1.28 0.55 1.06
Stockholders’ equity 55.49% 52.42% 50.06% 45.65% 42.54% 39.26%
Total liabilities and stockholders’ equity 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).

Current Liabilities Trends
Current liabilities as a percentage of total liabilities and stockholders’ equity showed a gradual decline from 24% in 2020 to 22.81% in 2025. Within this category, accounts payable fluctuated slightly, peaking at 5.21% in 2022 before declining to 4.48% in 2025. Accrued compensation decreased steadily from 2.61% in 2020 to 2.21% in 2025. Short-term income taxes showed minor variability, ending slightly higher at 1.16% in 2025 compared to 0.71% in 2020. Short-term unearned revenue exhibited a gradual decline from a high of 12.48% in 2022 down to 10.43% by 2025. Other current liabilities remained relatively stable, slightly increasing from 3.15% to 3.53% over the period. The current finance lease liabilities rose from 0.18% in 2020 to 0.51% in 2025.
Debt Structure and Long-Term Liabilities
A notable trend is the significant reduction in long-term debt excluding the current portion, which dropped steadily from 19.77% in 2020 to 6.49% in 2025, indicating a strong deleveraging effort. Correspondingly, total long-term liabilities decreased from 36.74% to 21.7% over the same period. Long-term income taxes also declined from 9.77% to 4.2%. Long-term unearned revenue decreased mildly. Deferred income taxes showed an increase starting in 2023, rising from 0.07% in 2020 to a peak of 0.51% in 2024 before slightly falling to 0.46% in 2025. Long-term finance lease liabilities exhibited a significant upward trend, more than doubling from 2.97% in 2020 to 6.95% in 2025, suggesting increased commitments under finance leases. Long-term operating lease liabilities remained relatively constant around 3%, with a slight decrease towards the end.
Total Liabilities and Equity Composition
Total liabilities as a percentage of total liabilities and stockholders’ equity declined steadily from 60.74% in 2020 to 44.51% in 2025, reflecting a reduced reliance on liabilities. Equity components showed complementary trends: stockholders’ equity increased from 39.26% to 55.49% over the same period. Retained earnings made a substantial contribution to this increase, rising sharply from 11.47% in 2020 to 38.41% in 2025, indicating strong earnings retention or profitability accumulation. In contrast, common stock and paid-in capital decreased from 26.73% to 17.62%, possibly reflecting share buybacks or other capital structure adjustments. Accumulated other comprehensive income (loss) fluctuated, turning negative from 2022 onward but improving slightly by 2025, moving from -1.54% to -0.54%. These changes signify an overall strengthening of the equity base relative to liabilities.
Overall Financial Position Insights
The data indicate a deliberate shift towards a stronger equity position with reduced debt levels, particularly long-term debt. The increasing retained earnings ratio supports a robust accumulation of internal funds. Current liabilities have marginally decreased, and the nature of liabilities appears to be shifting with a reduction in debt balances and an increase in lease-related liabilities. The decline in common stock and paid-in capital with the simultaneous increase in retained earnings and equity suggests active management of the capital structure, potentially through dividend policies or share repurchase programs. The consistent total of 100% across liabilities and equity confirms internal consistency across reported periods.