Microsoft Corporation (MSFT) Financial Ratios
30 years of historical data (1996–2025) · Technology · Software - Infrastructure
EV/EBITDA
↓
19.29
↓-20% vs avg
5yr avg: 24.22
30Y Low7.5·High44.6
P/FCF
↑
42.67
+3% vs avg
5yr avg: 41.23
30Y Low8.9·High51.9
P/B Ratio
↓
8.94
↓-28% vs avg
5yr avg: 12.35
30Y Low3.7·High17.5
ROE
↓
33.3%
-18% vs avg
5yr avg: 40.7%
30Y Low12%·High52%
Debt/EBITDA
↓
0.69
↓-14% vs avg
5yr avg: 0.80
30Y Low0.2·High2.5
Percentile shows where the current value sits in 30-year historical distribution. Sparklines show 5-year trend.
MSFT Valuation Multiples
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
Microsoft Corporation trades at 30.2x earnings, 11% below its 5-year average of 34.0x, sitting at the 50th percentile of its historical range. Compared to the Technology sector median P/E of 26.7x, the stock trades at a premium of 13%. On a free-cash-flow basis, the stock trades at 42.7x P/FCF, roughly in line with the 5-year average of 41.2x.
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $3.06T | $3.71T | $3.34T | $2.54T | $1.94T | $2.06T | $1.56T | $1.04T | $768.6B | $539.9B | $410.0B |
| Enterprise Value | $3.14T | $3.80T | $3.42T | $2.59T | $2.00T | $2.13T | $1.63T | $1.11T | $844.1B | $627.7B | $457.8B |
| P/E Ratio → | 30.16 | 36.47 | 37.88 | 35.18 | 26.61 | 33.65 | 35.33 | 26.47 | 46.30 | 21.21 | 24.37 |
| P/S Ratio | 10.85 | 13.18 | 13.62 | 12.01 | 9.77 | 12.26 | 10.93 | 8.25 | 6.96 | 5.59 | 4.50 |
| P/B Ratio | 8.94 | 10.81 | 12.43 | 12.34 | 11.63 | 14.52 | 13.22 | 10.15 | 9.29 | 6.15 | 5.70 |
| P/FCF | 42.67 | 51.85 | 45.07 | 42.78 | 29.72 | 36.73 | 34.57 | 27.15 | 23.83 | 17.21 | 16.41 |
| P/OCF | 22.44 | 27.27 | 28.16 | 29.05 | 21.75 | 26.86 | 25.77 | 19.90 | 17.51 | 13.66 | 12.30 |
P/E links to full P/E history page with 30-year chart
MSFT EV Ratios
Enterprise-value multiples — capital-structure-neutral measures of total business value
Microsoft Corporation's enterprise value stands at 19.3x EBITDA, 20% below its 5-year average of 24.2x. The Technology sector median is 17.5x, placing the stock at a 10% premium on an enterprise-value basis.
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EV / Revenue | — | 13.47 | 13.94 | 12.22 | 10.09 | 12.67 | 11.41 | 8.85 | 7.65 | 6.50 | 5.02 |
| EV / EBITDA | 19.29 | 23.33 | 25.95 | 25.29 | 20.45 | 26.09 | 24.82 | 20.38 | 18.63 | 16.61 | 14.00 |
| EV / EBIT | 24.41 | 30.12 | 30.87 | 28.37 | 23.33 | 28.99 | 29.34 | 24.02 | 21.53 | 19.54 | 17.03 |
| EV / FCF | — | 53.00 | 46.14 | 43.54 | 30.71 | 37.94 | 36.08 | 29.11 | 26.17 | 20.01 | 18.32 |
MSFT Profitability
Margins and return-on-capital ratios measuring operating efficiency
Microsoft Corporation earns an operating margin of 45.6%. Operating margins have expanded from 41.8% to 45.6% over the past 3 years, signaling improving operational efficiency. Return on equity of 33.3% is exceptionally high. ROIC of 24.9% represents excellent returns on invested capital.
Margins
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | 68.8% | 68.8% | 69.8% | 68.9% | 68.4% | 68.9% | 67.8% | 65.9% | 65.2% | 64.5% | 64.0% |
| Operating Margin | 45.6% | 45.6% | 44.6% | 41.8% | 42.1% | 41.6% | 37.0% | 34.1% | 31.8% | 30.1% | 28.6% |
| Net Profit Margin | 36.1% | 36.1% | 36.0% | 34.1% | 36.7% | 36.5% | 31.0% | 31.2% | 15.0% | 26.4% | 22.5% |
Return on Capital
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE | 33.3% | 33.3% | 37.1% | 38.8% | 47.2% | 47.1% | 40.1% | 42.4% | 19.4% | 31.9% | 27.0% |
| ROA | 18.0% | 18.0% | 19.1% | 18.6% | 20.8% | 19.3% | 15.1% | 14.4% | 6.5% | 11.5% | 11.2% |
| ROIC | 24.9% | 24.9% | 27.4% | 27.6% | 28.4% | 26.4% | 21.8% | 19.2% | 15.8% | 14.7% | 17.0% |
| ROCE | 29.7% | 29.7% | 31.5% | 30.7% | 32.4% | 29.5% | 23.7% | 20.6% | 17.8% | 17.7% | 20.1% |
MSFT Leverage & Debt
Solvency and debt-coverage ratios — lower is generally safer
Microsoft Corporation carries a Debt/EBITDA ratio of 0.7x, which is very conservative (76% below the sector average of 2.9x). Net debt stands at $81.9B ($112.2B total debt minus $30.2B cash). Interest coverage of 52.8x signals virtually no risk of debt distress — earnings comfortably cover interest obligations.
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt / Equity | 0.33 | 0.33 | 0.36 | 0.39 | 0.47 | 0.58 | 0.69 | 0.84 | 1.06 | 1.09 | 0.75 |
| Debt / EBITDA | 0.69 | 0.69 | 0.74 | 0.78 | 0.80 | 1.01 | 1.25 | 1.58 | 1.93 | 2.53 | 1.66 |
| Net Debt / Equity | — | 0.24 | 0.30 | 0.22 | 0.39 | 0.48 | 0.58 | 0.73 | 0.91 | 1.00 | 0.66 |
| Net Debt / EBITDA | 0.50 | 0.50 | 0.60 | 0.44 | 0.66 | 0.83 | 1.04 | 1.37 | 1.67 | 2.32 | 1.46 |
| Debt / FCF | — | 1.14 | 1.07 | 0.75 | 0.99 | 1.21 | 1.52 | 1.96 | 2.34 | 2.80 | 1.91 |
| Interest Coverage | 52.84 | 52.84 | 37.72 | 46.38 | 41.58 | 31.31 | 21.47 | 17.27 | 14.35 | 14.46 | 21.63 |
MSFT Liquidity & Efficiency
Short-term solvency ratios and asset-utilisation metrics
A current ratio of 1.35x means Microsoft Corporation can comfortably meet its short-term obligations, though there is limited excess liquidity. The current ratio has declined from 1.77x to 1.35x over the past 3 years.
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Current Ratio | 1.35 | 1.35 | 1.27 | 1.77 | 1.78 | 2.08 | 2.52 | 2.53 | 2.90 | 2.92 | 2.35 |
| Quick Ratio | 1.35 | 1.35 | 1.27 | 1.75 | 1.75 | 2.05 | 2.49 | 2.50 | 2.86 | 2.88 | 2.31 |
| Cash Ratio | 0.67 | 0.67 | 0.60 | 1.07 | 1.10 | 1.47 | 1.89 | 1.93 | 2.29 | 2.39 | 1.91 |
| Asset Turnover | — | 0.46 | 0.48 | 0.51 | 0.54 | 0.50 | 0.47 | 0.44 | 0.43 | 0.39 | 0.47 |
| Inventory Turnover | 93.64 | 93.64 | 59.48 | 26.35 | 16.74 | 19.81 | 24.32 | 20.80 | 14.41 | 15.71 | 14.56 |
| Days Sales Outstanding | — | 90.57 | 84.76 | 83.86 | 81.48 | 82.61 | 81.70 | 85.63 | 87.58 | 84.78 | 73.19 |
MSFT Shareholder Yields
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Microsoft Corporation returns 1.4% to shareholders annually — split between a 0.8% dividend yield and 0.6% buyback yield. The payout ratio of 23.6% is conservative, leaving significant room for dividend growth or reinvestment. The earnings yield of 3.3% (inverse of P/E) provides a useful comparison to bond yields when assessing the stock's relative attractiveness to fixed income.
Dividends
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Dividend Yield | 0.8% | 0.6% | 0.7% | 0.8% | 0.9% | 0.8% | 1.0% | 1.3% | 1.7% | 2.2% | 2.7% |
| Payout Ratio | 23.6% | 23.6% | 24.7% | 27.4% | 24.9% | 27.0% | 34.2% | 35.2% | 76.6% | 46.5% | 53.6% |
Total Shareholder Return Metrics
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Yield | 3.3% | 2.7% | 2.6% | 2.8% | 3.8% | 3.0% | 2.8% | 3.8% | 2.2% | 4.7% | 4.1% |
| FCF Yield | 2.3% | 1.9% | 2.2% | 2.3% | 3.4% | 2.7% | 2.9% | 3.7% | 4.2% | 5.8% | 6.1% |
| Buyback Yield | 0.6% | 0.5% | 0.5% | 0.9% | 1.7% | 1.3% | 1.5% | 1.9% | 1.4% | 2.2% | 3.9% |
| Total Shareholder Yield | 1.4% | 1.1% | 1.2% | 1.7% | 2.6% | 2.1% | 2.4% | 3.2% | 3.0% | 4.4% | 6.6% |
| Shares Outstanding | — | $7.5B | $7.5B | $7.5B | $7.5B | $7.6B | $7.7B | $7.8B | $7.8B | $7.8B | $8.0B |
Peer Comparison
Compare MSFT with 10 similar companies in its peer group
| Company | Market Cap | P/E | EV/EBITDA | P/FCF | Gross Margin | Op Margin | ROE | ROIC | Debt/EBITDA |
|---|---|---|---|---|---|---|---|---|---|
 MSFTYou | $3.1T | 30.2 | 19.3 | 42.7 | 68.8% | 45.6% | 33.3% | 24.9% | 0.7 |
 AAPL | $4.2T | 38.1 | 29.4 | 42.2 | 46.9% | 32.0% | 171.4% | 67.4% | 0.8 |
 GOOGL | $4.7T | 35.9 | 31.5 | 64.1 | 59.7% | 32.1% | 35.7% | 25.1% | 0.4 |
 AMZN | $2.9T | 38.1 | 20.6 | 382.3 | 50.3% | 11.2% | 22.3% | 14.7% | 1.0 |
 META | $1.5T | 25.8 | 15.5 | 33.2 | 82.0% | 41.4% | 30.2% | 27.6% | 0.8 |
 ORCL | $533B | 42.7 | 26.3 | — | 70.5% | 30.8% | 82.4% | 12.8% | 4.4 |
 CRM | $180B | 24.0 | 20.1 | 12.5 | 77.7% | 21.5% | 12.4% | 10.9% | 0.8 |
 SAP | $201B | 24.5 | 15.4 | 21.6 | 73.8% | 26.7% | 15.5% | 16.0% | 0.7 |
 ADBE | $106B | 15.3 | 11.2 | 10.7 | 88.6% | 36.6% | 55.4% | 51.4% | 0.7 |
 NOW | $95B | 55.1 | 37.0 | 20.8 | 77.5% | 13.7% | 15.5% | 12.4% | 1.3 |
 WDAY | $34B | 50.0 | 24.3 | 12.2 | 75.7% | 10.7% | 8.2% | 8.5% | 0.6 |
| Technology Median | — | 26.7 | 17.5 | 19.5 | 48.9% | -0.6% | 2.5% | 3.0% | 2.9 |
Peer selection based on competitive and market overlap. Compare multiple stocks →
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Start ComparisonMSFT — Frequently Asked Questions
Quick answers to the most common questions about buying MSFT stock.
What is Microsoft Corporation's P/E ratio?
Microsoft Corporation's current P/E ratio is 30.2x. The historical average is 31.2x. This places it at the 50th percentile of its historical range.
What is Microsoft Corporation's EV/EBITDA?
Microsoft Corporation's current EV/EBITDA is 19.3x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 20.6x.
What is Microsoft Corporation's ROE?
Microsoft Corporation's return on equity (ROE) is 33.3%. This is above the typical threshold of 15-20% considered good for most companies. The historical average is 31.9%.
Is MSFT stock overvalued?
Based on historical data, Microsoft Corporation is trading at a P/E of 30.2x. This is at the 50th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
What is Microsoft Corporation's dividend yield?
Microsoft Corporation's current dividend yield is 0.78% with a payout ratio of 23.6%.
What are Microsoft Corporation's profit margins?
Microsoft Corporation has 68.8% gross margin and 45.6% operating margin. Operating margin above 20% indicates strong pricing power and cost efficiency.
How much debt does Microsoft Corporation have?
Microsoft Corporation's Debt/EBITDA ratio is 0.7x, indicating low leverage. A ratio below 2x is generally considered financially healthy.