Stock Analysis on Net

Microsoft Corp. (NASDAQ:MSFT)

Price to FCFE (P/FCFE)

Microsoft Excel

Free Cash Flow to Equity (FCFE)

Microsoft Corp., FCFE calculation

US$ in millions

Microsoft Excel
12 months ended: Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018
Net income 72,361 72,738 61,271 44,281 39,240 16,571
Net noncash charges 17,609 15,851 16,405 17,877 9,079 6,846
Changes in operating assets and liabilities (2,388) 446 (936) (1,483) 3,866 20,467
Net cash from operations 87,582 89,035 76,740 60,675 52,185 43,884
Repayments of short-term debt, maturities of 90 days or less, net (7,324)
Proceeds from issuance of debt 7,183
Cash premium on debt exchange (1,754) (3,417)
Repayments of debt (2,750) (9,023) (3,750) (5,518) (4,000) (10,060)
Additions to property and equipment (28,107) (23,886) (20,622) (15,441) (13,925) (11,632)
Free cash flow to equity (FCFE) 56,725 56,126 50,614 36,299 34,260 22,051

Based on: 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), 10-K (reporting date: 2018-06-30).

Item Description The company
FCFE Free cash flow to equity is the cash flow available to Microsoft Corp. equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made. Microsoft Corp. FCFE increased from 2021 to 2022 and from 2022 to 2023.

Price to FCFE Ratio, Current

Microsoft Corp., current P/FCFE calculation, comparison to benchmarks

Microsoft Excel
No. shares of common stock outstanding 7,430,436,229
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions) 56,725
FCFE per share 7.63
Current share price (P) 420.72
Valuation Ratio
P/FCFE 55.11
Benchmarks
P/FCFE, Competitors1
Accenture PLC 23.99
Adobe Inc. 35.09
International Business Machines Corp. 10.33
Intuit Inc. 45.77
Oracle Corp. 16.12
Palo Alto Networks Inc. 97.75
Salesforce Inc. 38.01
ServiceNow Inc. 57.80
Synopsys Inc. 57.69
P/FCFE, Sector
Software & Services 39.00
P/FCFE, Industry
Information Technology 43.21

Based on: 10-K (reporting date: 2023-06-30).

1 Click competitor name to see calculations.

If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.


Price to FCFE Ratio, Historical

Microsoft Corp., historical P/FCFE calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018
No. shares of common stock outstanding1 7,429,763,722 7,457,891,872 7,514,891,248 7,567,652,935 7,635,409,400 7,668,217,316
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions)2 56,725 56,126 50,614 36,299 34,260 22,051
FCFE per share3 7.63 7.53 6.74 4.80 4.49 2.88
Share price1, 4 330.72 276.41 286.50 205.01 138.06 108.04
Valuation Ratio
P/FCFE5 43.32 36.73 42.54 42.74 30.77 37.57
Benchmarks
P/FCFE, Competitors6
Accenture PLC 21.03 17.91 25.76 19.01 19.50 18.11
Adobe Inc. 41.83 21.32 34.26 41.36 41.90 19.87
International Business Machines Corp. 9.97 11.97 48.45 9.43 4.39
Intuit Inc. 38.74 13.86 86.74 17.36 34.61 29.29
Oracle Corp. 15.47 8.36 6.27 22.31 10.78
Palo Alto Networks Inc. 79.75 29.54 32.91 8.11 46.20 8.50
Salesforce Inc. 31.06 16.56 49.52 50.40 29.09
ServiceNow Inc. 58.13 44.44 64.54 49.83 68.98
Synopsys Inc. 57.04 33.41 40.55 45.07 77.64 19.63
P/FCFE, Sector
Software & Services 32.42 30.43 33.49 25.65 21.90
P/FCFE, Industry
Information Technology 33.34 26.56 27.30 23.29 18.92

Based on: 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), 10-K (reporting date: 2018-06-30).

1 Data adjusted for splits and stock dividends.

2 See details »

3 2023 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 56,725,000,000 ÷ 7,429,763,722 = 7.63

4 Closing price as at the filing date of Microsoft Corp. Annual Report.

5 2023 Calculation
P/FCFE = Share price ÷ FCFE per share
= 330.72 ÷ 7.63 = 43.32

6 Click competitor name to see calculations.

Valuation ratio Description The company
P/FCFE Price to free cash flow to equity is cash valuation indicator of stockholders’ equity. Microsoft Corp. P/FCFE ratio decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.