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

Solvency 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., solvency ratios

	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016
Debt Ratios
Debt to equity	0.50	0.62	0.77	0.97	1.23	0.76
Debt to equity (including operating lease liability)	0.58	0.69	0.84	1.06	1.23	0.76
Debt to capital	0.33	0.38	0.43	0.49	0.55	0.43
Debt to capital (including operating lease liability)	0.37	0.41	0.46	0.51	0.55	0.43
Debt to assets	0.21	0.24	0.27	0.31	0.37	0.28
Debt to assets (including operating lease liability)	0.25	0.27	0.30	0.34	0.37	0.28
Financial leverage	2.35	2.55	2.80	3.13	3.33	2.69
Coverage Ratios
Interest coverage	31.31	21.47	17.27	14.35	11.42	16.89
Fixed charge coverage	16.90	12.44	10.94	9.45	7.57	9.81

Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).

Solvency ratio	Description	The company
Debt to equity ratio	A solvency ratio calculated as total debt divided by total shareholders’ equity.	Microsoft Corp. debt to equity ratio improved from 2019 to 2020 and from 2020 to 2021.
Debt to equity ratio (including operating lease liability)	A solvency ratio calculated as total debt (including operating lease liability) divided by total shareholders’ equity.	Microsoft Corp. debt to equity ratio (including operating lease liability) improved from 2019 to 2020 and from 2020 to 2021.
Debt to capital ratio	A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity.	Microsoft Corp. debt to capital ratio improved from 2019 to 2020 and from 2020 to 2021.
Debt to capital ratio (including operating lease liability)	A solvency ratio calculated as total debt (including operating lease liability) divided by total debt (including operating lease liability) plus shareholders’ equity.	Microsoft Corp. debt to capital ratio (including operating lease liability) improved from 2019 to 2020 and from 2020 to 2021.
Debt to assets ratio	A solvency ratio calculated as total debt divided by total assets.	Microsoft Corp. debt to assets ratio improved from 2019 to 2020 and from 2020 to 2021.
Debt to assets ratio (including operating lease liability)	A solvency ratio calculated as total debt (including operating lease liability) divided by total assets.	Microsoft Corp. debt to assets ratio (including operating lease liability) improved from 2019 to 2020 and from 2020 to 2021.
Financial leverage ratio	A solvency ratio calculated as total assets divided by total shareholders’ equity.	Microsoft Corp. financial leverage ratio decreased from 2019 to 2020 and from 2020 to 2021.

Solvency ratio	Description	The company
Interest coverage ratio	A solvency ratio calculated as EBIT divided by interest payments.	Microsoft Corp. interest coverage ratio improved from 2019 to 2020 and from 2020 to 2021.
Fixed charge coverage ratio	A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges.	Microsoft Corp. fixed charge coverage ratio improved from 2019 to 2020 and from 2020 to 2021.

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

	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016
Selected Financial Data (US$ in millions)
Short-term debt	—	—	—	—	9,072	12,904
Current portion of long-term debt	8,072	3,749	5,516	3,998	1,049	—
Current finance lease liabilities	791	540	317	176	113	25
Long-term debt, excluding current portion	50,074	59,578	66,662	72,242	76,073	40,783
Long-term finance lease liabilities	11,750	8,956	6,257	4,125	2,425	761
Total debt	70,687	72,823	78,752	80,541	88,732	54,473

Stockholders’ equity	141,988	118,304	102,330	82,718	72,394	71,997
Solvency Ratio
Debt to equity¹	0.50	0.62	0.77	0.97	1.23	0.76
Benchmarks
Debt to Equity, Competitors²
Accenture PLC	0.00	0.00	0.00	0.00	0.00	0.00
Adobe Inc.	—	0.31	0.39	0.44	0.22	0.26
Autodesk Inc.	1.70	—	—	—	2.03	0.92
Automatic Data Processing Inc.	0.53	0.35	0.42	0.58	0.50	0.45
Fidelity National Information Services Inc.	—	0.41	0.41	0.88	0.81	1.08
Fiserv Inc.	—	0.64	0.66	2.60	1.79	1.80
International Business Machines Corp.	—	2.99	3.02	2.73	2.66	2.31
Intuit Inc.	0.21	0.66	0.12	0.19	0.36	0.86
Mastercard Inc.	—	1.98	1.45	1.17	0.99	0.92
Oracle Corp.	16.08	5.93	2.58	1.33	1.08	0.93
PayPal Holdings Inc.	—	0.45	0.29	0.13	0.06	0.00
salesforce.com inc.	0.07	0.09	0.22	0.21	0.32	0.36
ServiceNow Inc.	—	0.58	0.33	0.60	2.01	1.31
Visa Inc.	0.56	0.66	0.48	0.49	0.56	0.48
Debt to Equity, Sector
Software & Services	—	0.83	0.84	0.96	0.99	0.80
Debt to Equity, Industry
Information Technology	—	0.83	0.81	0.81	0.79	0.65

Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).

¹ 2021 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 70,687 ÷ 141,988 = 0.50

² Click competitor name to see calculations.

Solvency ratio	Description	The company
Debt to equity ratio	A solvency ratio calculated as total debt divided by total shareholders’ equity.	Microsoft Corp. debt to equity ratio improved from 2019 to 2020 and from 2020 to 2021.

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

	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016
Selected Financial Data (US$ in millions)
Short-term debt	—	—	—	—	9,072	12,904
Current portion of long-term debt	8,072	3,749	5,516	3,998	1,049	—
Current finance lease liabilities	791	540	317	176	113	25
Long-term debt, excluding current portion	50,074	59,578	66,662	72,242	76,073	40,783
Long-term finance lease liabilities	11,750	8,956	6,257	4,125	2,425	761
Total debt	70,687	72,823	78,752	80,541	88,732	54,473
Operating lease liabilities (included in Other current liabilities)	1,962	1,616	1,515	1,399	—	—
Long-term operating lease liabilities	9,629	7,671	6,188	5,568	—	—
Total debt (including operating lease liability)	82,278	82,110	86,455	87,508	88,732	54,473

Stockholders’ equity	141,988	118,304	102,330	82,718	72,394	71,997
Solvency Ratio
Debt to equity (including operating lease liability)¹	0.58	0.69	0.84	1.06	1.23	0.76
Benchmarks
Debt to Equity (including Operating Lease Liability), Competitors²
Accenture PLC	0.18	0.21	0.00	0.00	0.00	0.00
Adobe Inc.	—	0.35	0.39	0.44	0.22	0.26
Autodesk Inc.	2.18	—	—	—	2.03	0.92
Automatic Data Processing Inc.	0.61	0.43	0.42	0.58	0.50	0.45
Fidelity National Information Services Inc.	—	0.42	0.42	0.88	0.81	1.08
Fiserv Inc.	—	0.66	0.69	2.60	1.79	1.80
International Business Machines Corp.	—	3.23	3.27	2.73	2.66	2.31
Intuit Inc.	0.25	0.71	0.12	0.19	0.36	0.86
Mastercard Inc.	—	2.12	1.58	1.17	0.99	0.92
Oracle Corp.	16.61	6.10	2.58	1.33	1.08	0.93
PayPal Holdings Inc.	—	0.49	0.32	0.13	0.06	0.00
salesforce.com inc.	0.15	0.18	0.22	0.21	0.32	0.36
ServiceNow Inc.	—	0.75	0.53	0.60	2.01	1.31
Visa Inc.	0.57	0.68	0.48	0.49	0.56	0.48
Debt to Equity (including Operating Lease Liability), Sector
Software & Services	—	0.90	0.89	0.99	0.99	0.80
Debt to Equity (including Operating Lease Liability), Industry
Information Technology	—	0.90	0.84	0.83	0.79	0.65

Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).

¹ 2021 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= 82,278 ÷ 141,988 = 0.58

² Click competitor name to see calculations.

Solvency ratio	Description	The company
Debt to equity ratio (including operating lease liability)	A solvency ratio calculated as total debt (including operating lease liability) divided by total shareholders’ equity.	Microsoft Corp. debt to equity ratio (including operating lease liability) improved from 2019 to 2020 and from 2020 to 2021.

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

	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016
Selected Financial Data (US$ in millions)
Short-term debt	—	—	—	—	9,072	12,904
Current portion of long-term debt	8,072	3,749	5,516	3,998	1,049	—
Current finance lease liabilities	791	540	317	176	113	25
Long-term debt, excluding current portion	50,074	59,578	66,662	72,242	76,073	40,783
Long-term finance lease liabilities	11,750	8,956	6,257	4,125	2,425	761
Total debt	70,687	72,823	78,752	80,541	88,732	54,473
Stockholders’ equity	141,988	118,304	102,330	82,718	72,394	71,997
Total capital	212,675	191,127	181,082	163,259	161,126	126,470
Solvency Ratio
Debt to capital¹	0.33	0.38	0.43	0.49	0.55	0.43
Benchmarks
Debt to Capital, Competitors²
Accenture PLC	0.00	0.00	0.00	0.00	0.00	0.00
Adobe Inc.	—	0.24	0.28	0.31	0.18	0.20
Autodesk Inc.	0.63	1.07	1.11	1.19	0.67	0.48
Automatic Data Processing Inc.	0.35	0.26	0.30	0.37	0.33	0.31
Fidelity National Information Services Inc.	—	0.29	0.29	0.47	0.45	0.52
Fiserv Inc.	—	0.39	0.40	0.72	0.64	0.64
International Business Machines Corp.	—	0.75	0.75	0.73	0.73	0.70
Intuit Inc.	0.17	0.40	0.10	0.16	0.26	0.46
Mastercard Inc.	—	0.66	0.59	0.54	0.50	0.48
Oracle Corp.	0.94	0.86	0.72	0.57	0.52	0.48
PayPal Holdings Inc.	—	0.31	0.23	0.11	0.06	0.00
salesforce.com inc.	0.06	0.08	0.18	0.18	0.24	0.26
ServiceNow Inc.	—	0.37	0.25	0.37	0.67	0.57
Visa Inc.	0.36	0.40	0.33	0.33	0.36	0.33
Debt to Capital, Sector
Software & Services	—	0.45	0.46	0.49	0.50	0.45
Debt to Capital, Industry
Information Technology	—	0.45	0.45	0.45	0.44	0.39

Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).

¹ 2021 Calculation
Debt to capital = Total debt ÷ Total capital
= 70,687 ÷ 212,675 = 0.33

² Click competitor name to see calculations.

Solvency ratio	Description	The company
Debt to capital ratio	A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity.	Microsoft Corp. debt to capital ratio improved from 2019 to 2020 and from 2020 to 2021.

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

	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016
Selected Financial Data (US$ in millions)
Short-term debt	—	—	—	—	9,072	12,904
Current portion of long-term debt	8,072	3,749	5,516	3,998	1,049	—
Current finance lease liabilities	791	540	317	176	113	25
Long-term debt, excluding current portion	50,074	59,578	66,662	72,242	76,073	40,783
Long-term finance lease liabilities	11,750	8,956	6,257	4,125	2,425	761
Total debt	70,687	72,823	78,752	80,541	88,732	54,473
Operating lease liabilities (included in Other current liabilities)	1,962	1,616	1,515	1,399	—	—
Long-term operating lease liabilities	9,629	7,671	6,188	5,568	—	—
Total debt (including operating lease liability)	82,278	82,110	86,455	87,508	88,732	54,473
Stockholders’ equity	141,988	118,304	102,330	82,718	72,394	71,997
Total capital (including operating lease liability)	224,266	200,414	188,785	170,226	161,126	126,470
Solvency Ratio
Debt to capital (including operating lease liability)¹	0.37	0.41	0.46	0.51	0.55	0.43
Benchmarks
Debt to Capital (including Operating Lease Liability), Competitors²
Accenture PLC	0.15	0.17	0.00	0.00	0.00	0.00
Adobe Inc.	—	0.26	0.28	0.31	0.18	0.20
Autodesk Inc.	0.69	1.06	1.11	1.19	0.67	0.48
Automatic Data Processing Inc.	0.38	0.30	0.30	0.37	0.33	0.31
Fidelity National Information Services Inc.	—	0.29	0.30	0.47	0.45	0.52
Fiserv Inc.	—	0.40	0.41	0.72	0.64	0.64
International Business Machines Corp.	—	0.76	0.77	0.73	0.73	0.70
Intuit Inc.	0.20	0.42	0.10	0.16	0.26	0.46
Mastercard Inc.	—	0.68	0.61	0.54	0.50	0.48
Oracle Corp.	0.94	0.86	0.72	0.57	0.52	0.48
PayPal Holdings Inc.	—	0.33	0.24	0.11	0.06	0.00
salesforce.com inc.	0.13	0.16	0.18	0.18	0.24	0.26
ServiceNow Inc.	—	0.43	0.35	0.37	0.67	0.57
Visa Inc.	0.36	0.40	0.33	0.33	0.36	0.33
Debt to Capital (including Operating Lease Liability), Sector
Software & Services	—	0.47	0.47	0.50	0.50	0.45
Debt to Capital (including Operating Lease Liability), Industry
Information Technology	—	0.47	0.46	0.45	0.44	0.39

Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).

¹ 2021 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 82,278 ÷ 224,266 = 0.37

² Click competitor name to see calculations.

Solvency ratio	Description	The company
Debt to capital ratio (including operating lease liability)	A solvency ratio calculated as total debt (including operating lease liability) divided by total debt (including operating lease liability) plus shareholders’ equity.	Microsoft Corp. debt to capital ratio (including operating lease liability) improved from 2019 to 2020 and from 2020 to 2021.

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

	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016
Selected Financial Data (US$ in millions)
Short-term debt	—	—	—	—	9,072	12,904
Current portion of long-term debt	8,072	3,749	5,516	3,998	1,049	—
Current finance lease liabilities	791	540	317	176	113	25
Long-term debt, excluding current portion	50,074	59,578	66,662	72,242	76,073	40,783
Long-term finance lease liabilities	11,750	8,956	6,257	4,125	2,425	761
Total debt	70,687	72,823	78,752	80,541	88,732	54,473

Total assets	333,779	301,311	286,556	258,848	241,086	193,694
Solvency Ratio
Debt to assets¹	0.21	0.24	0.27	0.31	0.37	0.28
Benchmarks
Debt to Assets, Competitors²
Accenture PLC	0.00	0.00	0.00	0.00	0.00	0.00
Adobe Inc.	—	0.17	0.20	0.22	0.13	0.15
Autodesk Inc.	0.22	0.34	0.44	0.39	0.31	0.27
Automatic Data Processing Inc.	0.06	0.05	0.05	0.05	0.05	0.05
Fidelity National Information Services Inc.	—	0.24	0.24	0.38	0.36	0.40
Fiserv Inc.	—	0.28	0.28	0.53	0.48	0.47
International Business Machines Corp.	—	0.39	0.41	0.37	0.37	0.36
Intuit Inc.	0.13	0.31	0.07	0.08	0.12	0.24
Mastercard Inc.	—	0.38	0.29	0.25	0.25	0.28
Oracle Corp.	0.64	0.62	0.52	0.44	0.43	0.39
PayPal Holdings Inc.	—	0.13	0.10	0.05	0.02	0.00
salesforce.com inc.	0.04	0.06	0.11	0.10	0.14	0.14
ServiceNow Inc.	—	0.19	0.12	0.17	0.35	0.25
Visa Inc.	0.25	0.30	0.23	0.24	0.27	0.25
Debt to Assets, Sector
Software & Services	—	0.28	0.28	0.29	0.31	0.27
Debt to Assets, Industry
Information Technology	—	0.29	0.29	0.29	0.30	0.27

Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).

¹ 2021 Calculation
Debt to assets = Total debt ÷ Total assets
= 70,687 ÷ 333,779 = 0.21

² Click competitor name to see calculations.

Solvency ratio	Description	The company
Debt to assets ratio	A solvency ratio calculated as total debt divided by total assets.	Microsoft Corp. debt to assets ratio improved from 2019 to 2020 and from 2020 to 2021.

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

	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016
Selected Financial Data (US$ in millions)
Short-term debt	—	—	—	—	9,072	12,904
Current portion of long-term debt	8,072	3,749	5,516	3,998	1,049	—
Current finance lease liabilities	791	540	317	176	113	25
Long-term debt, excluding current portion	50,074	59,578	66,662	72,242	76,073	40,783
Long-term finance lease liabilities	11,750	8,956	6,257	4,125	2,425	761
Total debt	70,687	72,823	78,752	80,541	88,732	54,473
Operating lease liabilities (included in Other current liabilities)	1,962	1,616	1,515	1,399	—	—
Long-term operating lease liabilities	9,629	7,671	6,188	5,568	—	—
Total debt (including operating lease liability)	82,278	82,110	86,455	87,508	88,732	54,473

Total assets	333,779	301,311	286,556	258,848	241,086	193,694
Solvency Ratio
Debt to assets (including operating lease liability)¹	0.25	0.27	0.30	0.34	0.37	0.28
Benchmarks
Debt to Assets (including Operating Lease Liability), Competitors²
Accenture PLC	0.08	0.09	0.00	0.00	0.00	0.00
Adobe Inc.	—	0.19	0.20	0.22	0.13	0.15
Autodesk Inc.	0.29	0.41	0.44	0.39	0.31	0.27
Automatic Data Processing Inc.	0.07	0.06	0.05	0.05	0.05	0.05
Fidelity National Information Services Inc.	—	0.25	0.25	0.38	0.36	0.40
Fiserv Inc.	—	0.29	0.29	0.53	0.48	0.47
International Business Machines Corp.	—	0.43	0.45	0.37	0.37	0.36
Intuit Inc.	0.16	0.33	0.07	0.08	0.12	0.24
Mastercard Inc.	—	0.40	0.32	0.25	0.25	0.28
Oracle Corp.	0.66	0.64	0.52	0.44	0.43	0.39
PayPal Holdings Inc.	—	0.14	0.11	0.05	0.02	0.00
salesforce.com inc.	0.10	0.11	0.11	0.10	0.14	0.14
ServiceNow Inc.	—	0.24	0.19	0.17	0.35	0.25
Visa Inc.	0.26	0.30	0.23	0.24	0.27	0.25
Debt to Assets (including Operating Lease Liability), Sector
Software & Services	—	0.31	0.30	0.30	0.31	0.27
Debt to Assets (including Operating Lease Liability), Industry
Information Technology	—	0.31	0.30	0.29	0.30	0.27

Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).

¹ 2021 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 82,278 ÷ 333,779 = 0.25

² Click competitor name to see calculations.

Solvency ratio	Description	The company
Debt to assets ratio (including operating lease liability)	A solvency ratio calculated as total debt (including operating lease liability) divided by total assets.	Microsoft Corp. debt to assets ratio (including operating lease liability) improved from 2019 to 2020 and from 2020 to 2021.

Microsoft Corp., financial leverage calculation, comparison to benchmarks

	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016
Selected Financial Data (US$ in millions)
Total assets	333,779	301,311	286,556	258,848	241,086	193,694
Stockholders’ equity	141,988	118,304	102,330	82,718	72,394	71,997
Solvency Ratio
Financial leverage¹	2.35	2.55	2.80	3.13	3.33	2.69
Benchmarks
Financial Leverage, Competitors²
Accenture PLC	2.21	2.18	2.07	2.36	2.54	2.73
Adobe Inc.	—	1.83	1.97	2.00	1.72	1.71
Autodesk Inc.	7.54	—	—	—	6.54	3.41
Automatic Data Processing Inc.	8.60	6.81	7.76	10.72	9.35	9.74
Fidelity National Information Services Inc.	—	1.70	1.70	2.33	2.26	2.67
Fiserv Inc.	—	2.31	2.35	4.91	3.77	3.83
International Business Machines Corp.	—	7.57	7.30	7.35	7.12	6.44
Intuit Inc.	1.57	2.14	1.68	2.20	3.00	3.66
Mastercard Inc.	—	5.25	4.96	4.61	3.90	3.30
Oracle Corp.	25.03	9.56	4.99	3.00	2.51	2.37
PayPal Holdings Inc.	—	3.52	3.04	2.82	2.55	2.25
salesforce.com inc.	1.60	1.63	1.97	2.24	2.34	2.55
ServiceNow Inc.	—	3.07	2.83	3.49	5.82	5.26
Visa Inc.	2.21	2.23	2.09	2.04	2.08	1.95
Financial Leverage, Sector
Software & Services	—	2.94	2.98	3.25	3.17	2.93
Financial Leverage, Industry
Information Technology	—	2.87	2.81	2.83	2.63	2.44

Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).

¹ 2021 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 333,779 ÷ 141,988 = 2.35

² Click competitor name to see calculations.

Solvency ratio	Description	The company
Financial leverage ratio	A solvency ratio calculated as total assets divided by total shareholders’ equity.	Microsoft Corp. financial leverage ratio decreased from 2019 to 2020 and from 2020 to 2021.

Microsoft Corp., interest coverage calculation, comparison to benchmarks

	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016
Selected Financial Data (US$ in millions)
Net income	61,271	44,281	39,240	16,571	21,204	16,798
Add: Income tax expense	9,831	8,755	4,448	19,903	1,945	2,953
Add: Interest expense	2,346	2,591	2,686	2,733	2,222	1,243
Earnings before interest and tax (EBIT)	73,448	55,627	46,374	39,207	25,371	20,994
Solvency Ratio
Interest coverage¹	31.31	21.47	17.27	14.35	11.42	16.89
Benchmarks
Interest Coverage, Competitors²
Accenture PLC	131.46	205.84	273.26	298.26	297.95	345.67
Adobe Inc.	—	37.00	21.38	32.31	29.73	21.37
Autodesk Inc.	11.70	6.46	0.18	-15.15	-16.64	0.40
Automatic Data Processing Inc.	57.30	30.72	24.14	22.14	32.64	40.76
Fidelity National Information Services Inc.	—	1.77	2.04	4.47	3.88	3.25
Fiserv Inc.	—	2.64	3.19	9.11	8.90	9.72
International Business Machines Corp.	—	4.62	8.58	16.71	19.56	20.60
Intuit Inc.	89.14	158.00	126.40	76.15	45.10	35.37
Mastercard Inc.	—	21.42	44.44	39.73	43.35	60.43
Oracle Corp.	6.28	7.13	6.97	7.43	7.47	8.88
PayPal Holdings Inc.	—	25.23	27.07	31.86	315.29	544.67
salesforce.com inc.	21.33	6.39	7.38	3.32	1.29	1.89
ServiceNow Inc.	—	5.56	3.02	0.26	-1.79	-12.52
Visa Inc.	32.31	27.72	28.92	21.92	21.77	19.76
Interest Coverage, Sector
Software & Services	—	14.55	14.12	14.45	13.61	16.02
Interest Coverage, Industry
Information Technology	—	16.72	16.24	18.10	17.31	19.12

Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).

¹ 2021 Calculation
Interest coverage = EBIT ÷ Interest expense
= 73,448 ÷ 2,346 = 31.31

² Click competitor name to see calculations.

Solvency ratio	Description	The company
Interest coverage ratio	A solvency ratio calculated as EBIT divided by interest payments.	Microsoft Corp. interest coverage ratio improved from 2019 to 2020 and from 2020 to 2021.

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

	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016
Selected Financial Data (US$ in millions)
Net income	61,271	44,281	39,240	16,571	21,204	16,798
Add: Income tax expense	9,831	8,755	4,448	19,903	1,945	2,953
Add: Interest expense	2,346	2,591	2,686	2,733	2,222	1,243
Earnings before interest and tax (EBIT)	73,448	55,627	46,374	39,207	25,371	20,994
Add: Operating lease cost	2,127	2,043	1,707	1,585	1,300	1,000
Earnings before fixed charges and tax	75,575	57,670	48,081	40,792	26,671	21,994

Interest expense	2,346	2,591	2,686	2,733	2,222	1,243
Operating lease cost	2,127	2,043	1,707	1,585	1,300	1,000
Fixed charges	4,473	4,634	4,393	4,318	3,522	2,243
Solvency Ratio
Fixed charge coverage¹	16.90	12.44	10.94	9.45	7.57	9.81
Benchmarks
Fixed Charge Coverage, Competitors²
Accenture PLC	10.41	9.66	10.07	9.63	8.30	10.43
Adobe Inc.	—	18.77	10.78	13.34	12.26	9.79
Autodesk Inc.	4.58	3.09	0.62	-5.16	-4.51	0.78
Automatic Data Processing Inc.	15.85	12.22	8.51	7.43	9.05	7.82
Fidelity National Information Services Inc.	—	1.47	1.75	3.36	3.10	2.66
Fiserv Inc.	—	2.28	2.56	6.03	5.60	6.08
International Business Machines Corp.	—	2.62	4.41	5.26	5.69	6.77
Intuit Inc.	25.58	27.48	34.00	26.91	22.03	17.94
Mastercard Inc.	—	16.43	31.13	25.01	26.78	33.08
Oracle Corp.	5.17	5.68	5.50	6.38	6.39	7.44
PayPal Holdings Inc.	—	14.51	12.94	14.89	29.95	21.65
salesforce.com inc.	2.92	1.68	2.89	1.54	1.08	1.26
ServiceNow Inc.	—	2.29	1.69	0.61	-0.55	-5.67
Visa Inc.	26.74	22.89	19.17	16.32	17.20	15.28
Fixed Charge Coverage, Sector
Software & Services	—	8.32	8.39	8.33	7.77	8.60
Fixed Charge Coverage, Industry
Information Technology	—	10.36	10.69	11.65	10.94	11.53

Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).

¹ 2021 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 75,575 ÷ 4,473 = 16.90

² Click competitor name to see calculations.

Solvency 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. fixed charge coverage ratio improved from 2019 to 2020 and from 2020 to 2021.

Microsoft Corp. (NASDAQ:MSFT)

Analysis of Solvency Ratios

Solvency 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