Stock Analysis on Net

Microsoft Corp. (NASDAQ:MSFT)

Financial Reporting Quality: Aggregate Accruals

Microsoft Excel

Balance-Sheet-Based Accruals Ratio

Microsoft Corp., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel
Jun 30, 2024 Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019
Operating Assets
Total assets 512,163 411,976 364,840 333,779 301,311 286,556
Less: Cash and cash equivalents 18,315 34,704 13,931 14,224 13,576 11,356
Less: Short-term investments 57,228 76,558 90,826 116,110 122,951 122,463
Operating assets 436,620 300,714 260,083 203,445 164,784 152,737
Operating Liabilities
Total liabilities 243,686 205,753 198,298 191,791 183,007 184,226
Less: Short-term debt 6,693
Less: Current portion of long-term debt 2,249 5,247 2,749 8,072 3,749 5,516
Less: Current finance lease liabilities 2,349 1,197 1,060 791 540 317
Less: Long-term debt, excluding current portion 42,688 41,990 47,032 50,074 59,578 66,662
Less: Long-term finance lease liabilities 24,796 15,870 13,842 11,750 8,956 6,257
Operating liabilities 164,911 141,449 133,615 121,104 110,184 105,474
 
Net operating assets1 271,709 159,265 126,468 82,341 54,600 47,263
Balance-sheet-based aggregate accruals2 112,444 32,797 44,127 27,741 7,337
Financial Ratio
Balance-sheet-based accruals ratio3 52.18% 22.96% 42.27% 40.52% 14.41%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Accenture PLC 35.69% 16.32% 21.70% 27.93% 3.73%
Adobe Inc. -3.83% 1.85% -8.24% 14.14% 8.20%
Cadence Design Systems Inc. 11.17% 26.65% 4.43% 9.21%
CrowdStrike Holdings Inc.
International Business Machines Corp. 2.42% 1.55% -7.39% -9.64%
Intuit Inc. 3.35% -1.74% 85.68% 139.73% -1.39%
Oracle Corp. 4.30% 51.77% 9.90% 5.62% 1.35%
Palantir Technologies Inc.
Palo Alto Networks Inc. 89.91% 137.01% -124.73% 85.21% 69.06%
Salesforce Inc. -2.46% -2.30% 57.74% 10.87% 65.87%
ServiceNow Inc. 61.79% 12.89% 34.89% 19.95%
Synopsys Inc. 7.85% 13.85% 5.01% 0.36% 8.40%
Balance-Sheet-Based Accruals Ratio, Sector
Software & Services 0.00% 18.69% 29.34% 16.98% 200.00%
Balance-Sheet-Based Accruals Ratio, Industry
Information Technology 0.00% 9.02% 18.05% 19.29% 200.00%

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 operating assets = Operating assets – Operating liabilities
= 436,620164,911 = 271,709

2 2024 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2024 – Net operating assets2023
= 271,709159,265 = 112,444

3 2024 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 112,444 ÷ [(271,709 + 159,265) ÷ 2] = 52.18%

4 Click competitor name to see calculations.

Financial ratio Description The company
Balance-sheet-based accruals ratio Ratio is found by dividing balance-sheet-based aggregate accruals by average net operating assets. Using the balance-sheet-based accruals ratio, Microsoft Corp. deteriorated earnings quality from 2023 to 2024.

Cash-Flow-Statement-Based Accruals Ratio

Microsoft Corp., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
Jun 30, 2024 Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019
Net income 88,136 72,361 72,738 61,271 44,281 39,240
Less: Net cash from operations 118,548 87,582 89,035 76,740 60,675 52,185
Less: Net cash used in investing (96,970) (22,680) (30,311) (27,577) (12,223) (15,773)
Cash-flow-statement-based aggregate accruals 66,558 7,459 14,014 12,108 (4,171) 2,828
Financial Ratio
Cash-flow-statement-based accruals ratio1 30.89% 5.22% 13.42% 17.68% -8.19%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Accenture PLC 24.31% -0.19% 11.87% 11.80% -13.65%
Adobe Inc. -21.90% -21.73% -19.93% 9.21% -0.48%
Cadence Design Systems Inc. 3.78% 15.03% -5.75% -1.21%
CrowdStrike Holdings Inc.
International Business Machines Corp. 0.99% -7.22% -1.64% -13.41%
Intuit Inc. -8.44% -8.74% 25.60% 58.72% -34.22%
Oracle Corp. -1.01% 42.79% -30.58% 25.81% -31.35%
Palantir Technologies Inc.
Palo Alto Networks Inc. 33.84% -37.95% -196.64% -68.30% -488.47%
Salesforce Inc. -8.44% -8.49% 21.96% 10.57% -5.62%
ServiceNow Inc. 15.44% 8.80% -21.14% -12.82%
Synopsys Inc. -7.64% 0.20% -4.64% -4.88% 0.92%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Software & Services 0.00% 7.32% 2.04% 11.47% -28.66%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Information Technology 0.00% 1.41% 2.96% 8.76% -15.45%

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
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 66,558 ÷ [(271,709 + 159,265) ÷ 2] = 30.89%

2 Click competitor name to see calculations.

Financial ratio Description The company
Cash-flow-statement-based accruals ratio Ratio is found by dividing cash-flow-statement-based aggregate accruals by average net operating assets. Using the cash-flow-statement-based accruals ratio, Microsoft Corp. deteriorated earnings quality from 2023 to 2024.