Asset Structure and Solvency Analysis
Microsoft’s fiscal 2024 ended on June 30, 2024 and fiscal 2023 ended on June 30, 2023.
Microsoft’s total assets reached $512.16 billion as of June 30, 2024, up from $412 billion as of June 30, 2023.
Property and equipment, net were $135.6 billion as of June 6, 2024, accounting for 26.5% of the total assets.
Goodwill was $119.2 billion as of June 30, 2024, making up 31.2% of the total assets.
Total current assets were $159.7 billion as of June 30, 2024, composing 31.2% of the total assets.
Of total current assets, cash, cash equivalents and short-term investments were $75.54 billion, accounts receivable were $56.9 billion and other current assets were $26 billion.
As of June 30, 2024, total current liabilities were $125.3 billion and total liabilities were $243.7 billion.
With strong cash flow, Microsoft has a low level of debt.
In fiscal 2024, net cash from operations was $118.55 billion.
Profitability
Microsoft’s total revenues were $245.12 billion, $211.92 billion and $198.27 billion in fiscal 2024, 2023 and 2022, respectively.
In fiscal 2024, Microsoft’s total revenues were up 15.7% year-on-year.
In fiscal 2023, Microsoft’s total revenues were up 6.9% year-on-year.
Microsoft’s gross profit was $171 billion, $146 billion and $135.6 billion in fiscal 2024, 2023 and 2022, respectively.
The company’s gross profit margin was 69.8%, 68.9% and 68.4% in fiscal 2024, 2023 and 2022, respectively.
Net income was $88.1 billion, $72.36 billion and $72.74 billion in fiscal 2024, 2023 and 2022, respectively.
The company’s net profit margin was 36%, 34.1% and 36.7% in fiscal 2024, 2023 and 2022,respectively.
Cash flow Analysis
Net cash from operations was $118.55 billion, $87.58 billion and $89 billion in fiscal 2024, 2023 and 2022, respectively.
Additions to property and equipment were $44.48 billion, $28.1 billion and $23.89 billion in fiscal 2024, 2023 and 2022, respectively.
So, what was the free cash flow?
The free cash flow was $74 billion, $59.45 billion and $65.11 billion in fiscal 2024, 2023 and 2022, respectively.
Stock-based compensation will be setoff by the amount of stock repurchases.
The amount of stock-based compensation was $10.7 billion, $9.6 billion and $7.5 billion in fiscal 2024, 2023 and 2022, respectively.
The free cash after stock-based compensation was $63.3 billion, $49.85 billion and $57.65 billion in fiscal 2024, 2023 and 2022, respectively.
Common stock repurchases was $17.25 billion, $22.25 billion and $32.7 billion in fiscal 2024, 2023 and 2022, respectively.
Cash dividends were $21.77 billion, $19.8 billion and $18.13 billion in fiscal 2024, 2023 and 2022, respectively.
The combination of stock repurchases and cash dividends was $39 billion, $42 billion and $50.8 billion in fiscal 2024, 2023 and 2022, respectively.
The amount of common stock and cash dividends was less than the amount of free cash flow, mainly because Microsoft maintains its position through acquisitions.
Conclusion
Microsoft has a low level of debt with strong profitability.
The level of cash flow is aligned with its profitability.
We reckon that Microsoft’s reasonable valuation is about $1.5 trillion, roughly 20 times its free cash flow for fiscal 2024.
Now ,Microsoft stock price is $427.00 per share, which is equivalent to $3.17 trillion of market cap.
Disclaimer: The content is for reference only and does not constitute investment advice.
