Microsoft (BSP:MSFT34) ROCE %

: 32.61% (As of Dec. 2023)

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ROCE % measures how well a company generates profits from its capital. It is calculated as EBIT divided by Capital Employed, where Capital Employed is calculated as Total Assets minus Total Current Liabilities. Microsoft's annualized ROCE % for the quarter that ended in Dec. 2023 was 32.61%.

Microsoft ROCE % Historical Data

The historical data trend for Microsoft's ROCE % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Microsoft Annual Data

Trend

Jun14

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

ROCE %

22.45

28.50

30.51

33.38

31.03

Microsoft Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROCE %																30.02	32.00	32.33	35.68	32.61

Microsoft ROCE % Calculation

Microsoft's annualized ROCE % for the fiscal year that ended in Jun. 2023 is calculated as:

ROCE %	=	EBIT	/	( (Capital Employed	+	Capital Employed)	/ count )
		(A: Jun. 2023 )		(A: Jun. 2022 )		(A: Jun. 2023 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(A: Jun. 2023 )		(A: Jun. 2022 )		(A: Jun. 2023 )
	=	443040.882	/	( ( (1841602.868 - 479945.411)	+	(1999607.911 - 505508.001) )	/ 2 )
	=	443040.882	/	( (1361657.457	+	1494099.91)	/ 2 )
	=	443040.882	/	1427878.6835
	=	31.03 %

Microsoft's ROCE % of for the quarter that ended in Dec. 2023 is calculated as:

ROCE %	=	EBIT ⁽¹⁾	/	( (Capital Employed	+	Capital Employed)	/ count )
		(Q: Dec. 2023 )		(Q: Sep. 2023 )		(Q: Dec. 2023 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(Q: Dec. 2023 )		(Q: Sep. 2023 )		(Q: Dec. 2023 )
	=	537704.052	/	( ( (2201598.38 - 616310.251)	+	(2305640.088 - 592954.197) )	/ 2 )
	=	537704.052	/	( ( 1585288.129	+	1712685.891 )	/ 2 )
	=	537704.052	/	1648987.01
	=	32.61 %

(1) Note: The EBIT data used here is four times the quarterly (Dec. 2023) EBIT data.

Microsoft (BSP:MSFT34) ROCE % Explanation

ROCE % can be especially useful when comparing the performance of capital-intensive companies. Unlike ROE %, which indicates the profitability of Shareholders Equity, ROCE % also considers long-term debt in Capital Employed. This can be helpful when analyzing companies with significant debt, as the result is neutralized by taking debt into consideration.

Generally speaking, a higher ROCE % indicates a stonger profitability for a company. Moreover, it is important to look at the ratio from a long term perspective. Investors tend to favor companies with stable and rising ROCE % trend over those with volatile ones.

Microsoft ROCE % Related Terms

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Microsoft (BSP:MSFT34) Business Description

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Address

One Microsoft Way, Redmond, WA, USA, 98052-6399

Website

https://www.microsoft.com

Microsoft develops and licenses consumer and enterprise software. It is known for its Windows operating systems and Office productivity suite. The company is organized into three equally sized broad segments: productivity and business processes (legacy Microsoft Office, cloud-based Office 365, Exchange, SharePoint, Skype, LinkedIn, Dynamics), intelligence cloud (infrastructure- and platform-as-a-service offerings Azure, Windows Server OS, SQL Server), and more personal computing (Windows Client, Xbox, Bing search, display advertising, and Surface laptops, tablets, and desktops).

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