Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Microsoft Corp. (NASDAQ:MSFT)

Analysis of Profitability Ratios

Beginner level


Profitability Ratios (Summary)

Microsoft Corp., profitability ratios

Microsoft Excel LibreOffice Calc
Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Return on Sales
Gross profit margin 67.78% 65.90% 65.25% 61.91% 61.58% 64.70%
Operating profit margin 37.03% 34.14% 31.77% 24.82% 23.65% 19.41%
Net profit margin 30.96% 31.18% 15.02% 23.57% 19.69% 13.03%
Return on Investment
Return on equity (ROE) 37.43% 38.35% 20.03% 29.29% 23.33% 15.23%
Return on assets (ROA) 14.70% 13.69% 6.40% 8.80% 8.67% 6.92%

Based on: 10-K (filing date: 2020-07-31), 10-K (filing date: 2019-08-01), 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).

Profitability ratio Description The company
Gross profit margin Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. Microsoft Corp.’s gross profit margin ratio improved from 2018 to 2019 and from 2019 to 2020.
Operating profit margin A profitability ratio calculated as operating income divided by revenue. Microsoft Corp.’s operating profit margin ratio improved from 2018 to 2019 and from 2019 to 2020.
Net profit margin An indicator of profitability, calculated as net income divided by revenue. Microsoft Corp.’s net profit margin ratio improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.

Profitability ratio Description The company
ROE A profitability ratio calculated as net income divided by shareholders’ equity. Microsoft Corp.’s ROE improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.
ROA A profitability ratio calculated as net income divided by total assets. Microsoft Corp.’s ROA improved from 2018 to 2019 and from 2019 to 2020.

Gross Profit Margin

Microsoft Corp., gross profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Selected Financial Data (US$ in millions)
Gross margin 96,937  82,933  72,007  55,689  52,540  60,542 
Revenue 143,015  125,843  110,360  89,950  85,320  93,580 
Profitability Ratio
Gross profit margin1 67.78% 65.90% 65.25% 61.91% 61.58% 64.70%
Benchmarks
Gross Profit Margin, Competitors2
Adobe Inc. 85.03% 86.77% 86.16% 86.00% 84.48%
Alphabet Inc. 55.58% 56.48% 58.88% 61.08% 62.44%
Autodesk Inc. 90.08% 88.87% 85.25% 83.17% 85.20% 86.38%
Facebook Inc. 81.94% 83.25% 86.58% 86.29% 84.01%
International Business Machines Corp. 47.30% 46.41% 45.78% 47.92% 49.77%
Intuit Inc. 82.05% 82.80% 83.62% 84.37% 83.98% 82.71%
Oracle Corp. 79.68% 79.76% 79.71% 80.20% 79.81% 80.30%
salesforce.com inc. 75.23% 74.02% 73.54% 73.38% 75.18% 76.01%
ServiceNow Inc. 76.98% 76.13% 74.15% 71.33% 67.24%

Based on: 10-K (filing date: 2020-07-31), 10-K (filing date: 2019-08-01), 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).

1 2020 Calculation
Gross profit margin = 100 × Gross margin ÷ Revenue
= 100 × 96,937 ÷ 143,015 = 67.78%

2 Click competitor name to see calculations.

Profitability ratio Description The company
Gross profit margin Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. Microsoft Corp.’s gross profit margin ratio improved from 2018 to 2019 and from 2019 to 2020.

Operating Profit Margin

Microsoft Corp., operating profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Selected Financial Data (US$ in millions)
Operating income 52,959  42,959  35,058  22,326  20,182  18,161 
Revenue 143,015  125,843  110,360  89,950  85,320  93,580 
Profitability Ratio
Operating profit margin1 37.03% 34.14% 31.77% 24.82% 23.65% 19.41%
Benchmarks
Operating Profit Margin, Competitors2
Adobe Inc. 29.25% 31.45% 29.69% 25.51% 18.83%
Alphabet Inc. 21.15% 19.24% 23.59% 26.27% 25.82%
Autodesk Inc. 10.48% -0.97% -24.75% -24.60% 0.05% 4.80%
Facebook Inc. 33.93% 44.62% 49.70% 44.96% 34.72%
International Business Machines Corp. 13.67% 16.61% 14.91% 16.40% 19.19%
Intuit Inc. 28.34% 27.33% 25.10% 26.95% 26.46% 17.60%
Oracle Corp. 35.57% 34.26% 34.34% 33.69% 34.02% 36.29%
salesforce.com inc. 1.74% 4.03% 2.25% 0.77% 1.72% -2.71%
ServiceNow Inc. 1.22% -1.63% -5.25% -30.41% -16.55%
Operating Profit Margin, Sector
Software & Computer Services 25.56% 25.90% 25.11% 24.75% 23.05%
Operating Profit Margin, Industry
Technology 25.96% 27.06% 25.45% 24.51% 25.17%

Based on: 10-K (filing date: 2020-07-31), 10-K (filing date: 2019-08-01), 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).

1 2020 Calculation
Operating profit margin = 100 × Operating income ÷ Revenue
= 100 × 52,959 ÷ 143,015 = 37.03%

2 Click competitor name to see calculations.

Profitability ratio Description The company
Operating profit margin A profitability ratio calculated as operating income divided by revenue. Microsoft Corp.’s operating profit margin ratio improved from 2018 to 2019 and from 2019 to 2020.

Net Profit Margin

Microsoft Corp., net profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Selected Financial Data (US$ in millions)
Net income 44,281  39,240  16,571  21,204  16,798  12,193 
Revenue 143,015  125,843  110,360  89,950  85,320  93,580 
Profitability Ratio
Net profit margin1 30.96% 31.18% 15.02% 23.57% 19.69% 13.03%
Benchmarks
Net Profit Margin, Competitors2
Adobe Inc. 26.42% 28.69% 23.20% 19.96% 13.13%
Alphabet Inc. 21.22% 22.46% 11.42% 21.58% 21.80%
Autodesk Inc. 6.55% -3.14% -27.56% -28.66% -13.20% 3.26%
Facebook Inc. 26.15% 39.60% 39.20% 36.97% 20.57%
International Business Machines Corp. 12.22% 10.97% 7.27% 14.86% 16.14%
Intuit Inc. 23.78% 22.95% 20.31% 18.76% 20.86% 8.71%
Oracle Corp. 25.94% 28.05% 9.60% 24.74% 24.03% 26.00%
salesforce.com inc. 0.74% 8.36% 1.22% 2.14% -0.71% -4.89%
ServiceNow Inc. 18.11% -1.02% -7.71% -32.49% -19.73%
Net Profit Margin, Sector
Software & Computer Services 23.18% 18.85% 17.49% 20.09% 17.26%
Net Profit Margin, Industry
Technology 22.90% 20.81% 18.50% 19.30% 19.31%

Based on: 10-K (filing date: 2020-07-31), 10-K (filing date: 2019-08-01), 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).

1 2020 Calculation
Net profit margin = 100 × Net income ÷ Revenue
= 100 × 44,281 ÷ 143,015 = 30.96%

2 Click competitor name to see calculations.

Profitability ratio Description The company
Net profit margin An indicator of profitability, calculated as net income divided by revenue. Microsoft Corp.’s net profit margin ratio improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.

Return on Equity (ROE)

Microsoft Corp., ROE calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Selected Financial Data (US$ in millions)
Net income 44,281  39,240  16,571  21,204  16,798  12,193 
Stockholders’ equity 118,304  102,330  82,718  72,394  71,997  80,083 
Profitability Ratio
ROE1 37.43% 38.35% 20.03% 29.29% 23.33% 15.23%
Benchmarks
ROE, Competitors2
Adobe Inc. 28.03% 27.67% 20.02% 15.74% 8.99%
Alphabet Inc. 17.05% 17.30% 8.30% 14.01% 13.59%
Autodesk Inc. -79.35% -20.41% 3.69%
Facebook Inc. 18.29% 26.28% 21.43% 17.26% 8.34%
International Business Machines Corp. 45.25% 51.96% 32.70% 65.07% 92.48%
Intuit Inc. 35.76% 41.53% 51.44% 71.71% 84.32% 15.65%
Oracle Corp. 83.94% 50.87% 8.37% 17.33% 18.82% 20.42%
salesforce.com inc. 0.37% 7.11% 1.36% 2.40% -0.95% -6.61%
ServiceNow Inc. 29.45% -2.40% -25.53% -116.76% -35.01%
ROE, Sector
Software & Computer Services 24.78% 19.89% 17.21% 19.52% 17.29%
ROE, Industry
Technology 29.77% 26.95% 20.11% 20.72% 22.51%

Based on: 10-K (filing date: 2020-07-31), 10-K (filing date: 2019-08-01), 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).

1 2020 Calculation
ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 44,281 ÷ 118,304 = 37.43%

2 Click competitor name to see calculations.

Profitability ratio Description The company
ROE A profitability ratio calculated as net income divided by shareholders’ equity. Microsoft Corp.’s ROE improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.

Return on Assets (ROA)

Microsoft Corp., ROA calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015
Selected Financial Data (US$ in millions)
Net income 44,281  39,240  16,571  21,204  16,798  12,193 
Total assets 301,311  286,556  258,848  241,086  193,694  176,223 
Profitability Ratio
ROA1 14.70% 13.69% 6.40% 8.80% 8.67% 6.92%
Benchmarks
ROA, Competitors2
Adobe Inc. 14.22% 13.80% 11.65% 9.20% 5.37%
Alphabet Inc. 12.45% 13.20% 6.42% 11.63% 11.09%
Autodesk Inc. 3.47% -1.71% -13.78% -12.13% -5.99% 1.66%
Facebook Inc. 13.86% 22.72% 18.85% 15.73% 7.46%
International Business Machines Corp. 6.20% 7.07% 4.59% 10.11% 11.94%
Intuit Inc. 16.70% 24.78% 23.39% 23.87% 23.04% 7.35%
Oracle Corp. 8.78% 10.20% 2.79% 6.92% 7.93% 8.96%
salesforce.com inc. 0.23% 3.61% 0.61% 1.02% -0.37% -2.46%
ServiceNow Inc. 10.41% -0.69% -4.39% -22.22% -10.98%
ROA, Sector
Software & Computer Services 11.58% 9.45% 8.10% 9.90% 8.90%
ROA, Industry
Technology 12.84% 11.88% 9.15% 10.14% 11.33%

Based on: 10-K (filing date: 2020-07-31), 10-K (filing date: 2019-08-01), 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).

1 2020 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 44,281 ÷ 301,311 = 14.70%

2 Click competitor name to see calculations.

Profitability ratio Description The company
ROA A profitability ratio calculated as net income divided by total assets. Microsoft Corp.’s ROA improved from 2018 to 2019 and from 2019 to 2020.