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Microsoft Free Cash Flow per Share

: USD7.38 (TTM As of Jun. 2021)
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Microsoft's Free Cash Flow per Share for the three months ended in Jun. 2021 was USD2.15. Its Free Cash Flow per Share for the trailing twelve months (TTM) ended in Jun. 2021 was USD7.38.

During the past 12 months, the average Free Cash Flow per Share Growth Rate of Microsoft was 25.30% per year. During the past 3 years, the average Free Cash Flow per Share Growth Rate was 21.20% per year. During the past 5 years, the average Free Cash Flow per Share Growth Rate was 17.50% per year. During the past 10 years, the average Free Cash Flow per Share Growth Rate was 8.80% per year. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the FCF Growth Rate using Free Cash Flow per Share data.

The historical rank and industry rank for Microsoft's Free Cash Flow per Share or its related term are showing as below:

NAS:MSFT' s 3-Year FCF Growth Rate Range Over the Past 10 Years
Min: -5.9   Med: 13.75   Max: 80.4
Current: 21.2

-5.9
80.4

During the past 13 years, Microsoft's highest 3-Year average Free Cash Flow per Share Growth Rate was 80.40% per year. The lowest was -5.90% per year. And the median was 13.75% per year.

NAS:MSFT's 3-Year FCF Growth Rate is ranked higher than
66% of the 266 Companies
in the Software industry.

( Industry Median: -13.10 vs. NAS:MSFT: 21.20 )

Microsoft Free Cash Flow per Share Historical Data

The historical data trend for Microsoft's Free Cash Flow per Share 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 Jun12 Jun13 Jun14 Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21
Free Cash Flow per Share
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 4.01 4.14 4.94 5.89 7.38

Microsoft Quarterly Data
Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21
Free Cash Flow per Share 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 1.82 1.89 1.10 2.25 2.15

Microsoft Free Cash Flow per Share Calculation

Free Cashflow per Share is the amount of Free Cashflow per outstanding share of the company's stock.

Free Cash Flow is considered one of the most important parameters to measure a company's earnings power by value investors because it is not subject to estimates of Depreciation, Depletion and Amortization (DDA). However, when we look at the Free Cash Flow, we should look from a long term perspective, because any year's Free Cash Flow can be drastically affected by the spending on Property, Plant, & Equipment (PPE) of the business in that year. Over the long term, Free Cash Flow should give pretty good picture on the real earnings power of the company.

Note: GuruFocus does not calculate Free Cash Flow Per Share when Capital Expenditure is 0.

Microsoft's Free Cash Flow Per Share for the fiscal year that ended in Jun. 2021 is calculated as

Free Cash Flow Per Share(A: Jun. 2021 )
=(Cash Flow from Operations+Capital Expenditure)/Shares Outstanding (Diluted Average)
=(76740+-20622)/7608.000
=56118/7608.000
=7.38

Microsoft's Free Cash Flow Per Share for the quarter that ended in Jun. 2021 is calculated as

Free Cash Flow Per Share(Q: Jun. 2021 )
=(Cash Flow from Operations+Capital Expenditure)/Shares Outstanding (Diluted Average)
=(22710+-6452)/7581.000
=16258/7581.000
=2.14

Free Cash Flow per Share for the trailing twelve months (TTM) ended in Jun. 2021 adds up the quarterly data reported by the company within the most recent 12 months, which was USD7.38

* 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.


Microsoft  (NAS:MSFT) Free Cash Flow per Share Explanation

Free Cash Flow is very close to Warren Buffett's definition of Owner's Earnings, except that in Warren Buffett's Owner's Earnings, the spending for Property, Plant, and Equipment is only for maintenance (replacement), while in the Free Cash Flow calculation, the cost of new Property, Plant, and Equipment due to business expansion is also deducted. There, Free Cash Flow is more conservative than Owner's Earnings.

In Don Yacktman's calculation of forward rate of return, he uses Free Cash Flow for the calculation. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation.

This is what Yacktman said in his March 2012 interview - when the S&P 500 was at 1400:

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over seven years. The reason we use seven years is because research shows that seven years is the length of the typical business cycle.

Therefore, as of Jun21, Microsoft's Forward Rate of Return (Yacktman) % is

Forward Rate of Return (Yacktman) % (Jun21)=Normalized Free Cash Flow/Price+5-Year EBITDA Growth Rate
=5.1607619/270.9+0.2
=21.91 %

* 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

Free Cash Flow within a report period can be affected by management's decisions of capital spending. Therefore, it is important to look at long term when it comes to Free Cash Flow.


Microsoft Free Cash Flow per Share Related Terms

Thank you for viewing the detailed overview of Microsoft's Free Cash Flow per Share provided by GuruFocus.com. Please click on the following links to see related term pages.


Microsoft Business Description

Microsoft logo
Industry
Technology » Software NAICS : 511210 SIC : 7372
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
Jolla Alice L. officer: Chief Accounting Officer C/O MICROSOFT CORPORATION ONE MICROSOFT WAY REDMOND WA 98052-6300
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
Smith Bradford L officer: President/Chief Legal Officer 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
Hood Amy officer: EVP & Chief Financial Officer C/O MICROSOFT CORPORATION ONE MICROSOFT WAY REDMOND WA 98052-6399
Capossela Christopher C officer: EVP, Chief Marketing Officer C/O MICROSOFT CORPORATION ONE MICROSOFT WAY REDMOND WA 98052-6399
Peterson Sandra E director 100 PARSONS POND DRIVE FRANKLIN LAKES NJ 07417
Thompson John Wendell director C/O MICROSOFT CORPORATION ONE MICROSOFT WAY REDMOND WA 98053
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 L. director 2 FOLSOM STREET SAN FRANCISCO CA 94105
Stanton John W director 3650 131ST AVE SE #400 WESTERN WIRELESS CORP BELLEVUE WA 98006
Scharf Charles W director C/O VISA INC. 900 METRO CENTER BLVD. FOSTER CITY CA 94404

Microsoft Headlines

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