Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Microsoft Corp., profitability ratios
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
| 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. gross profit margin ratio improved from 2022 to 2023 and from 2023 to 2024. |
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Microsoft Corp. operating profit margin ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level. |
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Microsoft Corp. net profit margin ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 not reaching 2022 level. |
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Microsoft Corp. ROE deteriorated from 2022 to 2023 and from 2023 to 2024. |
| ROA | A profitability ratio calculated as net income divided by total assets. | Microsoft Corp. ROA deteriorated from 2022 to 2023 and from 2023 to 2024. |
Gross Profit Margin
Microsoft Corp., gross profit margin calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Gross margin | 171,008) | 146,052) | 135,620) | 115,856) | 96,937) | 82,933) | |
| Revenue | 245,122) | 211,915) | 198,270) | 168,088) | 143,015) | 125,843) | |
| Profitability Ratio | |||||||
| Gross profit margin1 | 69.76% | 68.92% | 68.40% | 68.93% | 67.78% | 65.90% | |
| Benchmarks | |||||||
| Gross Profit Margin, Competitors2 | |||||||
| Accenture PLC | 32.61% | 32.34% | 31.99% | 32.38% | 31.53% | 30.81% | |
| Adobe Inc. | — | 87.87% | 87.70% | 88.18% | 86.62% | 85.03% | |
| Autodesk Inc. | 90.70% | 90.41% | 90.46% | 91.11% | 90.08% | 88.87% | |
| Cadence Design Systems Inc. | — | 89.36% | 89.57% | 89.73% | 88.61% | 88.60% | |
| CrowdStrike Holdings Inc. | 75.27% | 73.17% | 73.60% | 73.75% | 70.58% | — | |
| International Business Machines Corp. | — | 55.45% | 54.00% | 54.90% | 48.32% | 47.30% | |
| Intuit Inc. | 78.72% | 78.13% | 81.09% | 82.53% | 82.05% | 82.80% | |
| Oracle Corp. | 71.41% | 72.85% | 79.08% | 80.59% | 79.68% | 79.76% | |
| Palo Alto Networks Inc. | 74.35% | 72.29% | 68.76% | 70.05% | 70.68% | 72.12% | |
| Salesforce Inc. | 75.50% | 73.34% | 73.48% | 74.41% | 75.23% | 74.02% | |
| ServiceNow Inc. | — | 78.59% | 78.29% | 77.05% | 78.16% | 76.98% | |
| Synopsys Inc. | — | 79.08% | 79.07% | 79.50% | 78.44% | 77.60% | |
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 2024 Calculation
Gross profit margin = 100 × Gross margin ÷ Revenue
= 100 × 171,008 ÷ 245,122 = 69.76%
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. gross profit margin ratio improved from 2022 to 2023 and from 2023 to 2024. |
Operating Profit Margin
Microsoft Corp., operating profit margin calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Operating income | 109,433) | 88,523) | 83,383) | 69,916) | 52,959) | 42,959) | |
| Revenue | 245,122) | 211,915) | 198,270) | 168,088) | 143,015) | 125,843) | |
| Profitability Ratio | |||||||
| Operating profit margin1 | 44.64% | 41.77% | 42.06% | 41.59% | 37.03% | 34.14% | |
| Benchmarks | |||||||
| Operating Profit Margin, Competitors2 | |||||||
| Accenture PLC | 14.79% | 13.74% | 15.21% | 15.08% | 14.69% | 14.59% | |
| Adobe Inc. | — | 34.26% | 34.64% | 36.76% | 32.93% | 29.25% | |
| Autodesk Inc. | 20.52% | 19.76% | 14.08% | 16.60% | 10.48% | -0.97% | |
| Cadence Design Systems Inc. | — | 30.59% | 30.15% | 26.07% | 24.06% | 21.05% | |
| CrowdStrike Holdings Inc. | -0.07% | -8.48% | -9.82% | -10.58% | -30.34% | — | |
| International Business Machines Corp. | — | 15.17% | 13.50% | 11.97% | 9.22% | 13.67% | |
| Intuit Inc. | 22.29% | 21.86% | 20.20% | 25.95% | 28.34% | 27.33% | |
| Oracle Corp. | 28.99% | 26.21% | 25.74% | 37.58% | 35.57% | 34.26% | |
| Palo Alto Networks Inc. | 8.52% | 5.62% | -3.43% | -7.15% | -5.25% | -1.87% | |
| Salesforce Inc. | 14.38% | 3.29% | 2.07% | 2.14% | 1.74% | 4.03% | |
| ServiceNow Inc. | — | 8.49% | 4.90% | 4.36% | 4.40% | 1.22% | |
| Synopsys Inc. | — | 21.72% | 22.87% | 17.48% | 16.83% | 15.48% | |
| Operating Profit Margin, Sector | |||||||
| Software & Services | — | 27.80% | 27.74% | 28.66% | 24.84% | 24.12% | |
| Operating Profit Margin, Industry | |||||||
| Information Technology | — | 26.16% | 28.27% | 28.69% | 24.91% | 25.33% | |
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 2024 Calculation
Operating profit margin = 100 × Operating income ÷ Revenue
= 100 × 109,433 ÷ 245,122 = 44.64%
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. operating profit margin ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level. |
Net Profit Margin
Microsoft Corp., net profit margin calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 88,136) | 72,361) | 72,738) | 61,271) | 44,281) | 39,240) | |
| Revenue | 245,122) | 211,915) | 198,270) | 168,088) | 143,015) | 125,843) | |
| Profitability Ratio | |||||||
| Net profit margin1 | 35.96% | 34.15% | 36.69% | 36.45% | 30.96% | 31.18% | |
| Benchmarks | |||||||
| Net Profit Margin, Competitors2 | |||||||
| Accenture PLC | 11.19% | 10.72% | 11.17% | 11.69% | 11.52% | 11.06% | |
| Adobe Inc. | — | 27.97% | 27.01% | 30.55% | 40.88% | 26.42% | |
| Autodesk Inc. | 16.48% | 16.44% | 11.33% | 31.88% | 6.55% | -3.14% | |
| Cadence Design Systems Inc. | — | 25.46% | 23.84% | 23.29% | 22.02% | 42.33% | |
| CrowdStrike Holdings Inc. | 2.92% | -8.18% | -16.18% | -10.59% | -29.45% | — | |
| International Business Machines Corp. | — | 12.13% | 2.71% | 10.01% | 7.59% | 12.22% | |
| Intuit Inc. | 18.19% | 16.59% | 16.23% | 21.41% | 23.78% | 22.95% | |
| Oracle Corp. | 19.76% | 17.02% | 15.83% | 33.96% | 25.94% | 28.05% | |
| Palo Alto Networks Inc. | 32.11% | 6.38% | -4.85% | -11.72% | -7.83% | -2.82% | |
| Salesforce Inc. | 11.87% | 0.66% | 5.45% | 19.16% | 0.74% | 8.36% | |
| ServiceNow Inc. | — | 19.30% | 4.49% | 3.90% | 2.62% | 18.11% | |
| Synopsys Inc. | — | 21.05% | 19.38% | 18.02% | 18.03% | 15.84% | |
| Net Profit Margin, Sector | |||||||
| Software & Services | — | 22.29% | 22.02% | 25.95% | 20.66% | 21.76% | |
| Net Profit Margin, Industry | |||||||
| Information Technology | — | 21.99% | 23.89% | 25.57% | 21.36% | 22.17% | |
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 2024 Calculation
Net profit margin = 100 × Net income ÷ Revenue
= 100 × 88,136 ÷ 245,122 = 35.96%
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. net profit margin ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 not reaching 2022 level. |
Return on Equity (ROE)
Microsoft Corp., ROE calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 88,136) | 72,361) | 72,738) | 61,271) | 44,281) | 39,240) | |
| Stockholders’ equity | 268,477) | 206,223) | 166,542) | 141,988) | 118,304) | 102,330) | |
| Profitability Ratio | |||||||
| ROE1 | 32.83% | 35.09% | 43.68% | 43.15% | 37.43% | 38.35% | |
| Benchmarks | |||||||
| ROE, Competitors2 | |||||||
| Accenture PLC | 25.68% | 26.75% | 31.11% | 30.25% | 30.05% | 33.17% | |
| Adobe Inc. | — | 32.86% | 33.85% | 32.59% | 39.66% | 28.03% | |
| Autodesk Inc. | 48.84% | 71.88% | 58.53% | 125.14% | — | — | |
| Cadence Design Systems Inc. | — | 30.58% | 30.93% | 25.39% | 23.69% | 47.03% | |
| CrowdStrike Holdings Inc. | 3.88% | -12.52% | -22.89% | -10.64% | -19.10% | — | |
| International Business Machines Corp. | — | 33.29% | 7.47% | 30.38% | 27.14% | 45.25% | |
| Intuit Inc. | 16.07% | 13.81% | 12.57% | 20.89% | 35.76% | 41.53% | |
| Oracle Corp. | 120.26% | 792.45% | — | 262.43% | 83.94% | 50.87% | |
| Palo Alto Networks Inc. | 49.86% | 25.15% | -127.14% | -78.63% | -24.23% | -5.16% | |
| Salesforce Inc. | 6.93% | 0.36% | 2.48% | 9.81% | 0.37% | 7.11% | |
| ServiceNow Inc. | — | 22.69% | 6.46% | 6.22% | 4.18% | 29.45% | |
| Synopsys Inc. | — | 20.01% | 17.85% | 14.31% | 13.54% | 13.04% | |
| ROE, Sector | |||||||
| Software & Services | — | 29.34% | 31.91% | 37.56% | 31.66% | 36.26% | |
| ROE, Industry | |||||||
| Information Technology | — | 31.55% | 38.07% | 42.16% | 35.04% | 36.44% | |
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 2024 Calculation
ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 88,136 ÷ 268,477 = 32.83%
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. ROE deteriorated from 2022 to 2023 and from 2023 to 2024. |
Return on Assets (ROA)
Microsoft Corp., ROA calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 88,136) | 72,361) | 72,738) | 61,271) | 44,281) | 39,240) | |
| Total assets | 512,163) | 411,976) | 364,840) | 333,779) | 301,311) | 286,556) | |
| Profitability Ratio | |||||||
| ROA1 | 17.21% | 17.56% | 19.94% | 18.36% | 14.70% | 13.69% | |
| Benchmarks | |||||||
| ROA, Competitors2 | |||||||
| Accenture PLC | 12.99% | 13.41% | 14.55% | 13.68% | 13.78% | 16.04% | |
| Adobe Inc. | — | 18.23% | 17.51% | 17.70% | 21.66% | 14.22% | |
| Autodesk Inc. | 9.14% | 8.72% | 5.77% | 16.60% | 3.47% | -1.71% | |
| Cadence Design Systems Inc. | — | 18.36% | 16.53% | 15.87% | 14.95% | 29.46% | |
| CrowdStrike Holdings Inc. | 1.34% | -3.65% | -6.49% | -3.39% | -10.09% | — | |
| International Business Machines Corp. | — | 5.55% | 1.29% | 4.35% | 3.58% | 6.20% | |
| Intuit Inc. | 9.22% | 8.58% | 7.45% | 13.29% | 16.70% | 24.78% | |
| Oracle Corp. | 7.42% | 6.33% | 6.15% | 10.48% | 8.78% | 10.20% | |
| Palo Alto Networks Inc. | 12.89% | 3.03% | -2.18% | -4.87% | -2.95% | -1.24% | |
| Salesforce Inc. | 4.14% | 0.21% | 1.52% | 6.14% | 0.23% | 3.61% | |
| ServiceNow Inc. | — | 9.96% | 2.44% | 2.13% | 1.36% | 10.41% | |
| Synopsys Inc. | — | 11.90% | 10.45% | 8.66% | 8.27% | 8.31% | |
| ROA, Sector | |||||||
| Software & Services | — | 11.38% | 11.56% | 12.60% | 9.97% | 10.89% | |
| ROA, Industry | |||||||
| Information Technology | — | 12.91% | 14.89% | 15.54% | 12.09% | 12.74% | |
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 2024 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 88,136 ÷ 512,163 = 17.21%
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. ROA deteriorated from 2022 to 2023 and from 2023 to 2024. |