Microsoft Corp. (NASDAQ:MSFT)

Net Fixed Asset Turnover

The net fixed asset turnover ratio exhibits a consistent declining trend from June 30, 2020, starting at 3.24 and gradually decreasing to 1.37 by June 30, 2025. This decline suggests a diminishing efficiency in generating sales from fixed assets over the observed period. The decrease is steady with no significant recoveries or plateaus, indicating potential changes in asset utilization or increased fixed asset base without proportional sales growth.

Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)

This measure also shows a steady downward trend similar to the net fixed asset turnover, beginning at 2.70 on June 30, 2020, and falling to 1.23 by June 30, 2025. The figures are consistently lower than the net fixed asset turnover not including leases, reflecting the impact of incorporating lease assets. The consistent decline reinforces the observation of decreasing asset efficiency when including leased assets.

Total Asset Turnover

The total asset turnover ratio demonstrates a more fluctuating pattern with mild volatility. Initially valued at 0.47 on June 30, 2020, it increases slightly to reach a peak around 0.56 during late 2021 and mid-2022, before declining back to 0.46 by June 30, 2025. The fluctuations suggest variability in overall asset management efficiency, with some short-term improvements being reversed in the long-term trend towards a modest decline.

Equity Turnover

Equity turnover shows a gradual but consistent decline starting at 1.21 on June 30, 2020, decreasing steadily to 0.82 by June 30, 2025. This indicates a reduction in the rate at which equity is utilized to generate revenue over time. The downward trend could reflect increasing equity base relative to sales or slowing sales growth relative to equity.

The analysis of the quarterly financial data reveals several notable trends across revenue, property and equipment, and net fixed asset turnover over the observed periods.

Revenue (US$ in millions)

The revenue figures demonstrate an overall upward trajectory from September 30, 2019, through June 30, 2025. Beginning at 33,055 million USD, revenue increased steadily with some fluctuations, reaching 76,441 million USD by June 30, 2025. Notably, there were periods of accelerated growth, particularly from mid-2020 onward, with revenue surpassing 50,000 million USD starting December 31, 2021, and continuing to rise consistently thereafter. This pattern indicates sustained business expansion and increasing sales performance over the years.

Property and equipment, net of accumulated depreciation (US$ in millions)

Property and equipment values likewise exhibit a continuous growth trend throughout the entire timeline. From an initial value of 38,409 million USD on September 30, 2019, the asset base expanded substantially to 204,966 million USD by June 30, 2025. The increases are incremental quarter-over-quarter, reflecting ongoing investments in fixed assets or capital expenditures. This significant expansion in property and equipment suggests a strategic focus on enhancing operational capacity and infrastructure over time.

Net fixed asset turnover (ratio)

The net fixed asset turnover ratio, available from March 31, 2020, onward, discloses a declining pattern throughout the periods observed. Starting at a ratio of 3.24, the measure decreases consistently to 1.37 by June 30, 2025. This decline indicates that, relative to the size of the fixed asset base, the efficiency in generating revenue per unit of fixed assets has diminished over time. Given the concurrent expansion in both revenue and property and equipment, the drop in turnover ratio suggests that property and equipment growth is outpacing revenue gains, reflecting either heavy asset investment or potentially lower asset utilization efficiency.

The financial data reveals several notable trends over the observed periods.

Revenue

There is a consistent upward trend in revenue from September 30, 2019, through June 30, 2025. Starting at approximately 33,055 million US dollars in late 2019, revenue increased steadily, reaching over 76,441 million US dollars by the middle of 2025. Despite minor fluctuations in the short term, the overall growth trajectory is positive, indicating expanding sales or service income over these periods.

Property and Equipment, Net

The net value of property and equipment, inclusive of operating lease right-of-use assets and after accumulated depreciation, has steadily increased across the time frame. Beginning at around 46,299 million US dollars in late 2019, it rose continuously to nearly 229,789 million US dollars by mid-2025. This consistent increase suggests ongoing investment in fixed assets or capital expenditures, reflecting expansion or upgrading of physical and leased assets.

Net Fixed Asset Turnover Ratio

The net fixed asset turnover ratio exhibited a clear declining pattern. From a level of 2.7 around March 31, 2020, the ratio decreased progressively to 1.23 by June 30, 2025. This indicates that revenue generated per unit of net fixed assets is diminishing over time. The decline suggests that asset base growth outpaces revenue growth, potentially reflecting large capital investments that have not yet fully translated into proportional revenue increases.

In summary, the company shows robust revenue growth alongside strong increases in capital investment in fixed assets. However, the efficiency in utilizing these assets to generate revenue appears to be decreasing, as indicated by the declining asset turnover ratio. This pattern could imply a strategic focus on scaling capacity, with a potential lag in asset productivity which may warrant monitoring in future periods.

The financial data reveals several notable trends in the company's quarterly performance over the observed periods.

Revenue

The revenue figures demonstrate a general upward trajectory from September 2019 through June 2025. Beginning at approximately $33,055 million, revenue experiences fluctuations but consistently grows, reaching over $76,000 million by June 2025. This indicates sustained growth in sales or service income, with occasional quarters showing accelerated increases, particularly from late 2021 onward. Despite some minor declines in specific quarters such as between September 2022 and September 2023, the overall pattern is positive with substantial growth reflecting expanding business activities.

Total Assets

Total assets also show a steady increase throughout the period. Starting near $279,000 million in late 2019, total assets grow to approximately $619,000 million by mid-2025. This more than doubling of asset base suggests significant capital investment, acquisitions, or accumulation of resources. The growth in assets appears continuous without notable contractions, which might imply ongoing capacity expansion, investment in infrastructure, or strong asset management strategies.

Total Asset Turnover Ratio

The total asset turnover ratio, which measures efficiency in using assets to generate revenue, presents a more variable pattern. It begins at 0.47 in early 2020 and improves to a peak of around 0.56 in the 2021-2022 timeframe, suggesting improved utilization of assets during these periods. Following this peak, the ratio gradually trends downward to approximately 0.46 by mid-2025. This decline indicates a reduction in revenue generated per unit of asset, possibly reflecting diminishing efficiency or changes in asset composition, such as increased holdings in less revenue-productive assets.

In summary, the company exhibits strong growth in both revenue and asset base over the analyzed quarters, reflecting expansion and investment. However, the gradual decline in asset turnover ratio after a peak suggests a need to monitor asset utilization efficiency to ensure continued profitability and operational effectiveness.

The financial data indicates a consistent upward trend in revenue over the analyzed periods. Starting from approximately $33 billion in the third quarter of 2019, revenue has shown growth with some fluctuations, reaching about $76 billion by the second quarter of 2025. This reflects a strong and steady increase in the company's sales performance, suggesting expanding business operations or increased market demand.

Stockholders’ equity has also demonstrated a continuous increase throughout the same timeframe. Beginning at around $106 billion in the third quarter of 2019, equity rose steadily to approximately $343 billion by the second quarter of 2025. This upward trend points to accumulated retained earnings, additional paid-in capital, or other comprehensive income contributing positively to the financial strength and net worth of the company over time.

The equity turnover ratio exhibits a different pattern. Starting at 1.21 in the first quarter of 2020, the ratio has gradually declined to 0.82 by the second quarter of 2025. This decreasing trend suggests that revenue is growing at a slower rate relative to the growth in stockholders’ equity. A declining equity turnover ratio can imply that the company is becoming more capital intensive, or that it is leveraging its equity base more conservatively, potentially indicating shifts in operational efficiency or investment strategy.

Revenue

Increased steadily from $33 billion to $76 billion over the examined periods, indicating strong sales growth.

Stockholders' Equity

Rose continuously from $106 billion to $343 billion, reflecting increased net asset value and financial stability.

Equity Turnover Ratio

Declined from 1.21 to 0.82, indicating revenue growth is lagging behind equity growth, which may point to changing efficiency or capital allocation dynamics.