Stock Analysis on Net
Stock Analysis on Net

Microsoft Corp. (NASDAQ:MSFT)

$24.99

Balance Sheet: Liabilities and Stockholders’ Equity

The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.

Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.

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

US$ in millions

Microsoft Excel
Jun 30, 2025 Jun 30, 2024 Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020
Accounts payable
Short-term debt
Current portion of long-term debt
Accrued compensation
Short-term income taxes
Short-term unearned revenue
Current finance lease liabilities
Other current liabilities
Current liabilities
Long-term debt, excluding current portion
Long-term income taxes
Long-term unearned revenue
Deferred income taxes
Long-term operating lease liabilities
Long-term finance lease liabilities
Other long-term liabilities
Long-term liabilities
Total liabilities
Common stock and paid-in capital
Retained earnings
Accumulated other comprehensive income (loss)
Stockholders’ equity
Total liabilities and stockholders’ equity

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).

The financial data reveals several notable trends in the liabilities and equity structure over the reported periods.

Current Liabilities
Current liabilities have increased steadily from approximately 72.3 billion US dollars in mid-2020 to around 141.2 billion US dollars by mid-2025, nearly doubling over the span. Key components such as accounts payable, accrued compensation, short-term income taxes, and short-term unearned revenue have all shown upward trends. Accounts payable grew from 12.5 billion to 27.7 billion, indicating increased operational obligations. Accrued compensation rose from 7.9 to 13.7 billion, suggesting higher employee-related expenses. Short-term income taxes also nearly tripled, reflecting increased profitability or changes in tax liabilities. The increase in short-term unearned revenue from 36.0 billion to 64.6 billion suggests enhanced advance payments or deferred income from customers. The emergence of short-term debt in 2024 at 6.7 billion indicates new short-term borrowing. Similarly, current finance lease liabilities saw a significant rise, particularly from 2022 onwards, pointing to expanded leasing obligations.
Long-Term Liabilities
Long-term liabilities demonstrate an intricate pattern. Total long-term liabilities decreased slightly from approximately 110.7 billion in 2020 to around 101.6 billion by 2023, then increased sharply to about 134.3 billion by 2025. A notable trend is the decline in long-term debt excluding the current portion from 59.6 billion to 40.2 billion, implying strategic debt repayments or reclassification to current liabilities. Conversely, long-term finance lease liabilities surged dramatically from 8.9 billion in 2020 to 43.0 billion in 2025, indicating significant capitalizing of lease obligations. Long-term operating lease liabilities also increased substantially, suggesting broader lease commitments. Deferred income taxes increased notably in the latest periods, which may reflect timing differences in tax recognition. Other long-term liabilities remained relatively stable.
Total Liabilities
Total liabilities have risen consistently from about 183.0 billion in 2020 to 275.5 billion in 2025, a substantial increase of over 50%, reflecting overall growth in obligations.
Shareholders’ Equity
Shareholders’ equity has increased markedly from roughly 118.3 billion in 2020 to 343.5 billion by 2025, nearly tripling in value. This growth is primarily driven by a substantial increase in retained earnings from 34.6 billion to 237.7 billion, indicating strong accumulation of profits. Common stock and paid-in capital also rose steadily, reflecting possible stock issuances or capital contributions. However, accumulated other comprehensive income consistently showed negative balances after 2021, reaching a low point in 2023 and improving slightly thereafter but remaining negative, which may reflect unfavorable currency translation adjustments, unrealized losses, or other comprehensive loss items.
Overall Financial Position
Total liabilities and stockholders’ equity expanded from 301.3 billion to 619.0 billion over the five years, consistent with significant company growth. The increase in liabilities alongside strong equity growth suggests aggressive expansion financed by a combination of retained earnings and increased indebtedness, especially in leasing commitments.