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Microsoft (NAS:MSFT) ROE %

: 41.30% (As of Sep. 2022)
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ROE % is calculated as Net Income divided by its average Total Stockholders Equity over a certain period of time. Microsoft's annualized net income for the quarter that ended in Sep. 2022 was $70,224 Mil. Microsoft's average Total Stockholders Equity over the quarter that ended in Sep. 2022 was $170,054 Mil. Therefore, Microsoft's annualized ROE % for the quarter that ended in Sep. 2022 was 41.30%.

The historical rank and industry rank for Microsoft's ROE % or its related term are showing as below:

MSFT' s ROE % Range Over the Past 10 Years
Min: 14.36   Med: 31.01   Max: 47.15
Current: 42.81

During the past 13 years, Microsoft's highest ROE % was 47.15%. The lowest was 14.36%. And the median was 31.01%.

MSFT's ROE % is ranked better than
95.47% of 2605 companies
in the Software industry
Industry Median: 2.59 vs MSFT: 42.81

Microsoft (NAS:MSFT) ROE % Historical Data

The historical data trend for Microsoft's ROE % 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.

* Premium members only.

Microsoft Annual Data
Trend Jun13 Jun14 Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21 Jun22
ROE % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 19.45 42.41 40.14 47.08 47.15

Microsoft Quarterly Data
Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22
ROE % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 55.80 48.12 41.44 40.65 41.30

Microsoft (NAS:MSFT) ROE % Competitive Comparison

For the Software - Infrastructure subindustry, Microsoft's ROE %, along with its competitors' market caps and ROE % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Microsoft (NAS:MSFT) ROE % Distribution

For the Software industry and Technology sector, Microsoft's ROE % distribution charts can be found below:

* The bar in red indicates where Microsoft's ROE % falls into.



Microsoft ROE % Calculation

Microsoft's annualized ROE % for the fiscal year that ended in Jun. 2022 is calculated as

ROE %=Net Income (A: Jun. 2022 )/( (Total Stockholders Equity (A: Jun. 2021 )+Total Stockholders Equity (A: Jun. 2022 ))/ count )
=72738/( (141988+166542)/ 2 )
=72738/154265
=47.15 %

Microsoft's annualized ROE % for the quarter that ended in Sep. 2022 is calculated as

ROE %=Net Income (Q: Sep. 2022 )/( (Total Stockholders Equity (Q: Jun. 2022 )+Total Stockholders Equity (Q: Sep. 2022 ))/ count )
=70224/( (166542+173566)/ 2 )
=70224/170054
=41.30 %

* 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.

In the calculation of annual ROE %, the net income of the last fiscal year and the average total shareholder equity over the fiscal year are used. In calculating the quarterly data, the net income data used here is four times the quarterly (Sep. 2022) net income data. ROE % is displayed in the 30-year financial page.


Microsoft  (NAS:MSFT) ROE % Explanation

ROE % measures the rate of return on the ownership interest (shareholder's equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE % shows how well a company uses investment funds to generate earnings growth. ROE %s between 15% and 20% are considered desirable.

The factors that affect a company's ROE % can be illustrated with the three-step DuPont Analysis:

ROE %(Q: Sep. 2022 )
=Net Income/Total Stockholders Equity
=70224/170054
=(Net Income / Revenue )*(Revenue / Total Assets)*(Total Assets / Total Stockholders Equity)
=(70224 / 200488)*(200488 / 362312)*(362312 / 170054)
=Net Margin %*Asset Turnover*Equity Multiplier
=35.03 %*0.5534*2.1306
=ROA %*Equity Multiplier
=19.39 %*2.1306
=41.30 %

With this breakdown, it is clear that if a company grows its Net Profit Margin, its Asset Turnover, or its Leverage, it can grow its ROE %.

The factors that affect a company's ROE % can also be illustrated with the five-step DuPont Analysis:

ROE %(Q: Sep. 2022 )
=Net Income/Total Stockholders Equity
=70224/170054
=(Net Income / Pre-Tax Income) * (Pre-Tax Income / Operating Income) * (Operating Income / Revenue) * (Revenue / Total Assets) * (Total Assets / Total Stockholders Equity)
= (70224 / 86288) * (86288 / 86072) * (86072 / 200488) * (200488 / 362312) * (362312 / 170054)
= Tax Burden * Interest Burden * Operating Margin % * Asset Turnover * Equity Multiplier
= 0.8138 * 1.0025 * 42.93 % * 0.5534 * 2.1306
=41.30 %

Note: The net income data used here is four times the quarterly (Sep. 2022) net income data. The Revenue data used here is four times the quarterly (Sep. 2022) revenue data. The same rule applies to Pre-Tax Income and Operating Income.
* In the five-step DuPont Analysis, Operating Income is only available for non-financial companies. Thus, for Insurance companies, we use EBIT as a substitution of Operating Income. For Banks, both Operating Income and EBIT is unavailable. Thus we combined Interest Burden and Operating Margin % into Pretax Margin %, and the DuPont Analysis is divided into four components instead.

* 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.


Be Aware

Net Income is used.

Because a company can increase its ROE % by having more financial leverage, it is important to watch the equity multiplier when investing in high ROE % companies. Like ROA %, ROE % is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

Asset light businesses require very few assets to generate very high earnings. Their ROE %s can be extremely high.


Microsoft ROE % Related Terms

Thank you for viewing the detailed overview of Microsoft's ROE % provided by GuruFocus.com. Please click on the following links to see related term pages.


Microsoft (NAS:MSFT) Business Description

Microsoft logo
Address
One Microsoft Way, Redmond, WA, USA, 98052-6399
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).
Executives
Rodriguez Carlos A director 10200 SUNSET DRIVE MIAMI FL 33173
Young Christopher David officer: EVP, Business Development C/O MICROSOFT CORPORATION ONE MICROSOFT WAY REDMOND WA 98052-6399
Althoff Judson officer: EVP, Chief Commercial Officer MICROSOFT CORPORATION ONE MICROSOFT WAY REDMOND WA 98052
Stanton John W director 3650 131ST AVE SE #400 WESTERN WIRELESS CORP BELLEVUE WA 98006
Johnston Hugh F director PEPSICO, INC. 700 ANDERSON HILL ROAD PURCHASE NY 10577
Scharf Charles W director C/O VISA INC. 900 METRO CENTER BLVD. FOSTER CITY CA 94404
Peterson Sandra E director 100 PARSONS POND DRIVE FRANKLIN LAKES NJ 07417
Pritzker Penny S director C/O PRITZKER FAMILY OFFICE, L.L.C. 300 N. LASALLE STREET, SUITE 1500 CHICAGO IL 60654
Warrior Padmasree director C/O GAP INC. 2 FOLSOM STREET SAN FRANCISCO CA 94105
Hoffman Reid director C/O LINKEDIN CORPORATION 2029 STIERLIN COURT MOUNTAIN VIEW CA 94043
List Teri director 2200 PENNSYLVANIA AVENUE SUITE 800W WASHINGTON DC 20037
Walmsley Emma N director C/O MICROSOFT CORPORATION ONE MICROSOFT WAY REDMOND WA 98052-6399
Hogan Kathleen T officer: EVP, Human Resources C/O MICROSOFT CORPORATION ONE MICROSOFT WAY REDMOND WA 98052-6399
Nadella Satya director, officer: Chief Executive Officer C/O MICROSOFT CORPORATION ONE MICROSOFT WAY REDMOND WA 98052-6399
Courtois Jean Philippe officer: Executive Vice President MICROSOFT CORPORATION ONE MICROSOFT WAY REDMOND WA 98052-6399

Microsoft (NAS:MSFT) Headlines

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