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, 2024 Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019
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: 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).

The financial data over the period shows distinct trends in liabilities, equity, and the overall financial structure. The analysis focuses on the changes and patterns observed from 2019 through mid-2024.

Current Liabilities
Current liabilities have exhibited a consistent upward trajectory, increasing from approximately $69.4 billion in 2019 to $125.3 billion in 2024. This rise is driven largely by growth in accounts payable, which surged from $9.4 billion to nearly $22.0 billion. Similarly, accrued compensation rose notably from $6.8 billion to $12.6 billion, indicating increased employee-related expenses or accruals. Short-term income taxes generally increased from $5.7 billion to $5.0 billion, with some fluctuations, and current finance lease liabilities more than doubled, suggesting expanding lease obligations. The introduction of short-term debt in 2024 at $6.7 billion signals changes in short-term financing arrangements.
Long-term Liabilities
Long-term liabilities experienced a slight overall decline initially, dropping from approximately $114.8 billion in 2019 to just over $101.6 billion in 2023 before rising sharply to $118.4 billion in 2024. This fluctuation includes a consistent decrease in long-term debt (excluding current portion), which decreased from $66.7 billion to about $42.7 billion by 2024. However, there is a significant increase in long-term finance lease liabilities and operating lease liabilities, reflecting increased lease commitments, which doubled and more than doubled, respectively, by 2024. Deferred income taxes increased substantially in 2024, while other long-term liabilities showed moderate growth.
Total Liabilities
Total liabilities increased every year from $184.2 billion in 2019 to $243.7 billion in 2024, with the most rapid increase occurring between 2023 and 2024. This growth reflects a combination of rising current liabilities and long-term liabilities, with lease-related liabilities constituting a significant portion of this increase.
Stockholders’ Equity
Stockholders’ equity showed solid growth, increasing from $102.3 billion in 2019 to $268.5 billion in 2024. The increase was fueled by a notable rise in retained earnings, which expanded from $24.2 billion to $173.1 billion, indicating strong profitability or retained profits over the period. Common stock and paid-in capital also increased steadily, although at a slower pace compared to retained earnings. Accumulated other comprehensive income (loss) fluctuated, starting negative, briefly turning positive, then declining to a negative value by 2024, suggesting volatility in other comprehensive income components such as foreign currency translation or unrealized gains and losses.
Total Assets and Financial Position
The total of liabilities and stockholders' equity rose markedly from $286.6 billion in 2019 to $512.2 billion in 2024. This substantial growth signals overall expansion in the company's asset base and financial scale. The escalating liabilities alongside growing equity indicate increased financing activities, both through debt and reinvested earnings.

In summary, the data reveals a pattern of substantial growth in both liabilities and equity, reflecting expansion and increased operational scale. The company has reduced traditional long-term debt but has increased lease liabilities considerably, suggesting a shift in financing or asset usage strategy. Retained earnings growth strengthens equity, pointing to robust profitability, while the increase in current liabilities requires attention to short-term financial commitments. The changes in deferred taxes and accumulated other comprehensive income indicate evolving tax and other comprehensive income dynamics. Overall, the financial data suggests a growing and evolving financial structure with increased reliance on leasing and solid earnings retention.