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Long-term Debt and Solvency Analysis
Difficulty: Beginner
Solvency ratios also known as long-term debt ratios measure a company’s ability to meet long-term obligations.
Ratios (Summary)
Microsoft Corp., debt and solvency ratios
| Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | Jun 30, 2013 | ||
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| Debt to capital | |
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Based on: 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31), 10-K (filing date: 2013-07-30).
| Ratio | Description | The company |
|---|---|---|
| Debt-to-equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | Microsoft Corp.’s debt-to-equity ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018. |
| Debt-to-capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | Microsoft Corp.’s debt-to-capital ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018. |
| Ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | Microsoft Corp.’s interest coverage ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 not reaching 2016 level. |
Debt to Equity
Microsoft Corp., debt to equity calculation, comparison to benchmarks
Based on: 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31), 10-K (filing date: 2013-07-30).
2018 Calculations
1 Debt to equity = Total debt ÷ Stockholders’ equity
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Debt-to-equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | Microsoft Corp.’s debt-to-equity ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018. |
Debt to Capital
Microsoft Corp., debt to capital calculation, comparison to benchmarks
Based on: 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31), 10-K (filing date: 2013-07-30).
2018 Calculations
1 Debt to capital = Total debt ÷ Total capital
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Debt-to-capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | Microsoft Corp.’s debt-to-capital ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018. |
Interest Coverage
Microsoft Corp., interest coverage calculation, comparison to benchmarks
Based on: 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31), 10-K (filing date: 2013-07-30).
2018 Calculations
1 Interest coverage = EBIT ÷ Interest expense
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | Microsoft Corp.’s interest coverage ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 not reaching 2016 level. |
