Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
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Microsoft Corp., common-size consolidated balance sheet: liabilities and stockholders’ equity
Based on: 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), 10-K (reporting date: 2019-06-30).
- Current liabilities
- Current liabilities as a percentage of total liabilities and stockholders’ equity exhibited a moderate fluctuation, rising from 24.23% in mid-2019 to a peak of 26.56% in 2021, then gradually declining to 24.46% by mid-2024. Accounts payable followed a similar trend, increasing from 3.27% in 2019 up to 5.21% in 2022, before slightly decreasing to 4.29% in 2024. The current portion of long-term debt showed volatility, dropping sharply in 2020, rebounding in 2021, and then declining again to a low of 0.44% in 2024. Accrued compensation increased steadily until 2021 and then gradually declined. Short-term income taxes decreased significantly in 2020 and remained relatively low thereafter. Short-term unearned revenue remained relatively stable, fluctuating around 11% to 12.5%, with a slight decline by 2024.
- Short-term debt and finance lease liabilities
- Short-term debt was not reported until 2024, at 1.31%, indicating a new or previously unreported financing source. Current finance lease liabilities showed a consistent increase from 0.11% in 2019 to 0.46% in 2024, suggesting a gradual rise in leasing obligations accounted for within current liabilities.
- Other current liabilities
- Other current liabilities remained stable, around 3.15% to 3.29% throughout the period, indicating steady obligations not classified under other specific current liabilities.
- Long-term liabilities
- Long-term liabilities as a proportion of total liabilities and stockholders’ equity steadily decreased from 40.06% in 2019 to 23.12% in 2024. This decline was largely driven by a consistent reduction in long-term debt excluding the current portion, which decreased from 23.26% to 8.33%. Long-term income taxes followed a downward trend from 10.33% to 5.45%. Long-term unearned revenue also declined steadily. Conversely, deferred income taxes experienced a notable increase after remaining minimal in earlier years, rising to 0.51% in 2024. Long-term operating and finance lease liabilities both exhibited an increasing trend, with finance lease liabilities rising more markedly to 4.84% in 2024, suggesting an increased reliance on leased assets accounted long-term.
- Equity
- Stockholders’ equity steadily increased as a percentage of total liabilities and stockholders' equity from 35.71% in 2019 to 52.42% in 2024, reflecting a strengthening equity base. Retained earnings were the primary contributor to this increase, rising substantially from 8.43% to 33.81%, suggesting robust profitability and earnings retention. Common stock and paid-in capital decreased from 27.4% to 19.71%, possibly indicating share repurchases or changes in capital structure. Accumulated other comprehensive income (loss) showed volatility, turning positive in 2020 but then trending negative thereafter, though the absolute impact remained relatively small.
- Overall financial structure
- The total liabilities portion of the capital structure consistently declined over the period, from 64.29% in 2019 to 47.58% in 2024, indicating an improvement in leverage and a shift towards equity financing. This transition reflects a decrease in both short-term and long-term indebtedness relative to the overall capital base. The increase in equity percentage aligns with a strategy of strengthening financial stability and possibly reducing financial risk.