Solvency ratios also known as long-term debt ratios measure a company’s ability to meet long-term obligations.

Ratios (Summary)
Debt to Equity
Debt to Equity (including Operating Lease Liability)
Debt to Capital
Debt to Capital (including Operating Lease Liability)
Debt to Assets
Debt to Assets (including Operating Lease Liability)
Financial Leverage
Interest Coverage
Fixed Charge Coverage

Microsoft Corp., debt and solvency ratios

		Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
	Debt Ratios
	Debt to equity
	Debt to equity (including operating lease liability)
	Debt to capital
	Debt to capital (including operating lease liability)
	Debt to assets
	Debt to assets (including operating lease liability)
	Financial leverage
	Coverage Ratios
	Interest coverage
	Fixed charge coverage

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 improved from 2017 to 2018 not reaching 2016 level.
Debt to equity (including operating lease liability) ratio	A solvency ratio calculated as total debt (including operating lease liability) divided by total shareholders’ equity.	Microsoft Corp.’s debt to equity (including operating lease liability) 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 improved from 2017 to 2018 not reaching 2016 level.
Debt to capital (including operating lease liability) ratio	A solvency ratio calculated as total debt (including operating lease liability) divided by total debt (including operating lease liability) plus shareholders’ equity.	Microsoft Corp.’s debt to capital (including operating lease liability) ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.
Debt to assets ratio	A solvency ratio calculated as total debt divided by total assets.	Microsoft Corp.’s debt to assets ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 not reaching 2016 level.
Debt to assets (including operating lease liability) ratio	A solvency ratio calculated as total debt (including operating lease liability) divided by total assets.	Microsoft Corp.’s debt to assets (including operating lease liability) ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.
Financial leverage ratio	A solvency ratio calculated as total assets divided by total shareholders’ equity.	Microsoft Corp.’s financial leverage 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.
Fixed charge coverage ratio	A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges.	Microsoft Corp.’s fixed charge coverage ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 not reaching 2016 level.

Microsoft Corp., debt to equity calculation, comparison to benchmarks

		Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
	Selected Financial Data (USD $ in millions)
	Short-term debt
	Current portion of long-term debt
	Long-term debt, excluding current portion
	Total debt

	Stockholders’ equity
	Ratio
	Debt to equity¹
	Benchmarks
	Debt to Equity, Competitors
	Adobe Inc.
	Alphabet Inc.
	Facebook Inc.
	International Business Machines Corp.
	Intuit Inc.
	Oracle Corp.
	salesforce.com inc.
	Debt to Equity, Sector
	Software & Computer Services
	Debt to Equity, Industry
	Technology

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
= hidden ÷ hidden = hidden

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 improved from 2017 to 2018 not reaching 2016 level.

Microsoft Corp., debt to equity (including operating lease liability) calculation, comparison to benchmarks

		Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
	Selected Financial Data (USD $ in millions)
	Short-term debt
	Current portion of long-term debt
	Long-term debt, excluding current portion
	Total debt
	Current operating lease liabilities
	Long-term operating lease liabilities
	Total debt (including operating lease liability)

	Stockholders’ equity
	Ratio
	Debt to equity (including operating lease liability)¹
	Benchmarks
	Debt to Equity (including Operating Lease Liability), Sector
	Software & Computer Services
	Debt to Equity (including Operating Lease Liability), Industry
	Technology

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 (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= hidden ÷ hidden = hidden

Ratio	Description	The company
Debt to equity (including operating lease liability) ratio	A solvency ratio calculated as total debt (including operating lease liability) divided by total shareholders’ equity.	Microsoft Corp.’s debt to equity (including operating lease liability) ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.

Microsoft Corp., debt to capital calculation, comparison to benchmarks

		Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
	Selected Financial Data (USD $ in millions)
	Short-term debt
	Current portion of long-term debt
	Long-term debt, excluding current portion
	Total debt
	Stockholders’ equity
	Total capital
	Ratio
	Debt to capital¹
	Benchmarks
	Debt to Capital, Competitors
	Adobe Inc.
	Alphabet Inc.
	Facebook Inc.
	International Business Machines Corp.
	Intuit Inc.
	Oracle Corp.
	salesforce.com inc.
	Debt to Capital, Sector
	Software & Computer Services
	Debt to Capital, Industry
	Technology

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
= hidden ÷ hidden = hidden

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 improved from 2017 to 2018 not reaching 2016 level.

Microsoft Corp., debt to capital (including operating lease liability) calculation, comparison to benchmarks

		Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
	Selected Financial Data (USD $ in millions)
	Short-term debt
	Current portion of long-term debt
	Long-term debt, excluding current portion
	Total debt
	Current operating lease liabilities
	Long-term operating lease liabilities
	Total debt (including operating lease liability)
	Stockholders’ equity
	Total capital (including operating lease liability)
	Ratio
	Debt to capital (including operating lease liability)¹
	Benchmarks
	Debt to Capital (including Operating Lease Liability), Sector
	Software & Computer Services
	Debt to Capital (including Operating Lease Liability), Industry
	Technology

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 (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= hidden ÷ hidden = hidden

Ratio	Description	The company
Debt to capital (including operating lease liability) ratio	A solvency ratio calculated as total debt (including operating lease liability) divided by total debt (including operating lease liability) plus shareholders’ equity.	Microsoft Corp.’s debt to capital (including operating lease liability) ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.

Microsoft Corp., debt to assets calculation, comparison to benchmarks

		Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
	Selected Financial Data (USD $ in millions)
	Short-term debt
	Current portion of long-term debt
	Long-term debt, excluding current portion
	Total debt

	Total assets
	Ratio
	Debt to assets¹
	Benchmarks
	Debt to Assets, Competitors
	Adobe Inc.
	Alphabet Inc.
	Facebook Inc.
	International Business Machines Corp.
	Intuit Inc.
	Oracle Corp.
	salesforce.com inc.
	Debt to Assets, Sector
	Software & Computer Services
	Debt to Assets, Industry
	Technology

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 assets = Total debt ÷ Total assets
= hidden ÷ hidden = hidden

Ratio	Description	The company
Debt to assets ratio	A solvency ratio calculated as total debt divided by total assets.	Microsoft Corp.’s debt to assets ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 not reaching 2016 level.

Microsoft Corp., debt to assets (including operating lease liability) calculation, comparison to benchmarks

		Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
	Selected Financial Data (USD $ in millions)
	Short-term debt
	Current portion of long-term debt
	Long-term debt, excluding current portion
	Total debt
	Current operating lease liabilities
	Long-term operating lease liabilities
	Total debt (including operating lease liability)

	Total assets
	Ratio
	Debt to assets (including operating lease liability)¹
	Benchmarks
	Debt to Assets (including Operating Lease Liability), Sector
	Software & Computer Services
	Debt to Assets (including Operating Lease Liability), Industry
	Technology

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 assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= hidden ÷ hidden = hidden

Ratio	Description	The company
Debt to assets (including operating lease liability) ratio	A solvency ratio calculated as total debt (including operating lease liability) divided by total assets.	Microsoft Corp.’s debt to assets (including operating lease liability) ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.

Microsoft Corp., financial leverage calculation, comparison to benchmarks

		Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
	Selected Financial Data (USD $ in millions)
	Total assets
	Stockholders’ equity
	Ratio
	Financial leverage¹
	Benchmarks
	Financial Leverage, Competitors
	Adobe Inc.
	Alphabet Inc.
	Facebook Inc.
	International Business Machines Corp.
	Intuit Inc.
	Oracle Corp.
	salesforce.com inc.
	Financial Leverage, Sector
	Software & Computer Services
	Financial Leverage, Industry
	Technology

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 Financial leverage = Total assets ÷ Stockholders’ equity
= hidden ÷ hidden = hidden

Ratio	Description	The company
Financial leverage ratio	A solvency ratio calculated as total assets divided by total shareholders’ equity.	Microsoft Corp.’s financial leverage ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.

Microsoft Corp., interest coverage calculation, comparison to benchmarks

		Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
	Selected Financial Data (USD $ in millions)
	Net income
	Add: Income tax expense
	Add: Interest expense
	Earnings before interest and tax (EBIT)
	Ratio
	Interest coverage¹
	Benchmarks
	Interest Coverage, Competitors
	Adobe Inc.
	Alphabet Inc.
	Facebook Inc.
	International Business Machines Corp.
	Intuit Inc.
	Oracle Corp.
	salesforce.com inc.
	Interest Coverage, Sector
	Software & Computer Services
	Interest Coverage, Industry
	Technology

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
= hidden ÷ hidden = hidden

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.

Microsoft Corp., fixed charge coverage calculation, comparison to benchmarks

		Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
	Selected Financial Data (USD $ in millions)
	Net income
	Add: Income tax expense
	Add: Interest expense
	Earnings before interest and tax (EBIT)
	Add: Operating lease cost
	Earnings before fixed charges and tax

	Interest expense
	Operating lease cost
	Fixed charges
	Ratio
	Fixed charge coverage¹
	Benchmarks
	Fixed Charge Coverage, Competitors
	Adobe Inc.
	Alphabet Inc.
	Facebook Inc.
	International Business Machines Corp.
	Intuit Inc.
	Oracle Corp.
	salesforce.com inc.
	Fixed Charge Coverage, Sector
	Software & Computer Services
	Fixed Charge Coverage, Industry
	Technology

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 Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= hidden ÷ hidden = hidden

Ratio	Description	The company
Fixed charge coverage ratio	A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges.	Microsoft Corp.’s fixed charge coverage ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 not reaching 2016 level.

	Microsoft Corp.	Other companies (not purchased previously)
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Microsoft Corp. (MSFT)

Long-term Debt and Solvency Analysis

Ratios (Summary)

Debt to Equity

Debt to Equity (including Operating Lease Liability)

Debt to Capital

Debt to Capital (including Operating Lease Liability)

Debt to Assets

Debt to Assets (including Operating Lease Liability)

Financial Leverage

Interest Coverage

Fixed Charge Coverage