Latest Ratios: P/E Ratio 27.7x · EV/EBITDA 19.6x · ROE 34.0%. (1997–2026 historical series)
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $3.70T | $2.78T | $3.71T | $3.34T | $2.54T | $1.94T | $2.06T | $1.56T | $1.04T | $768.6B | $539.9B |
| Enterprise Value | $3.81T | $2.89T | $3.80T | $3.42T | $2.59T | $2.00T | $2.13T | $1.63T | $1.11T | $844.1B | $627.7B |
| P/E Ratio → | 27.74 | 20.78 | 36.47 | 37.88 | 35.18 | 26.61 | 33.65 | 35.33 | 26.47 | 46.30 | 21.21 |
| P/S Ratio | 11.14 | 8.38 | 13.18 | 13.62 | 12.01 | 9.77 | 12.26 | 10.93 | 8.25 | 6.96 | 5.59 |
| P/B Ratio | 8.39 | 6.28 | 10.81 | 12.43 | 12.34 | 11.63 | 14.52 | 13.22 | 10.15 | 9.29 | 6.15 |
| P/FCF | 55.20 | 41.50 | 51.85 | 45.07 | 42.78 | 29.72 | 36.73 | 34.57 | 27.15 | 23.83 | 17.21 |
| P/OCF | 20.21 | 15.20 | 27.27 | 28.16 | 29.05 | 21.75 | 26.86 | 25.77 | 19.90 | 17.51 | 13.66 |
P/E links to full P/E history page with 30-year chart
Enterprise-value multiples — capital-structure-neutral measures of total business value
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EV / Revenue | — | 8.70 | 13.47 | 13.94 | 12.22 | 10.09 | 12.67 | 11.41 | 8.85 | 7.65 | 6.50 |
| EV / EBITDA | 19.64 | 14.90 | 23.33 | 25.95 | 25.29 | 20.45 | 26.09 | 24.82 | 20.38 | 18.63 | 16.61 |
| EV / EBIT | 24.52 | 17.09 | 30.12 | 30.87 | 28.37 | 23.33 | 28.99 | 29.34 | 24.02 | 21.53 | 19.54 |
| EV / FCF | — | 43.11 | 53.00 | 46.14 | 43.54 | 30.71 | 37.94 | 36.08 | 29.11 | 26.17 | 20.01 |
Margins and return-on-capital ratios measuring operating efficiency
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | 67.9% | 67.9% | 68.8% | 69.8% | 68.9% | 68.4% | 68.9% | 67.8% | 65.9% | 65.2% | 64.5% |
| Operating Margin | 46.8% | 46.8% | 45.6% | 44.6% | 41.8% | 42.1% | 41.6% | 37.0% | 34.1% | 31.8% | 30.1% |
| Net Profit Margin | 40.3% | 40.3% | 36.1% | 36.0% | 34.1% | 36.7% | 36.5% | 31.0% | 31.2% | 15.0% | 26.4% |
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE | 34.0% | 34.0% | 33.3% | 37.1% | 38.8% | 47.2% | 47.1% | 40.1% | 42.4% | 19.4% | 31.9% |
| ROA | 19.4% | 19.4% | 18.0% | 19.1% | 18.6% | 20.8% | 19.3% | 15.1% | 14.4% | 6.5% | 11.5% |
| ROIC | 23.9% | 23.9% | 24.9% | 27.4% | 27.6% | 28.4% | 26.4% | 21.8% | 19.2% | 15.8% | 14.7% |
| ROCE | 29.1% | 29.1% | 29.7% | 31.5% | 30.7% | 32.4% | 29.5% | 23.7% | 20.6% | 17.8% | 17.7% |
Solvency and debt-coverage ratios — lower is generally safer
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt / Equity | 0.29 | 0.29 | 0.33 | 0.36 | 0.39 | 0.47 | 0.58 | 0.69 | 0.84 | 1.06 | 1.09 |
| Debt / EBITDA | 0.66 | 0.66 | 0.69 | 0.74 | 0.78 | 0.80 | 1.01 | 1.25 | 1.58 | 1.93 | 2.53 |
| Net Debt / Equity | — | 0.24 | 0.24 | 0.30 | 0.22 | 0.39 | 0.48 | 0.58 | 0.73 | 0.91 | 1.00 |
| Net Debt / EBITDA | 0.56 | 0.56 | 0.50 | 0.60 | 0.44 | 0.66 | 0.83 | 1.04 | 1.37 | 1.67 | 2.32 |
| Debt / FCF | — | 1.61 | 1.14 | 1.07 | 0.75 | 0.99 | 1.21 | 1.52 | 1.96 | 2.34 | 2.80 |
| Interest Coverage | 55.39 | 55.39 | 52.84 | 37.72 | 46.38 | 41.58 | 31.31 | 21.47 | 17.27 | 14.35 | 14.46 |
Short-term solvency ratios and asset-utilisation metrics
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Current Ratio | 1.23 | 1.23 | 1.35 | 1.27 | 1.77 | 1.78 | 2.08 | 2.52 | 2.53 | 2.90 | 2.92 |
| Quick Ratio | 1.22 | 1.22 | 1.35 | 1.27 | 1.75 | 1.75 | 2.05 | 2.49 | 2.50 | 2.86 | 2.88 |
| Cash Ratio | 0.46 | 0.46 | 0.67 | 0.60 | 1.07 | 1.10 | 1.47 | 1.89 | 1.93 | 2.29 | 2.39 |
| Asset Turnover | — | 0.44 | 0.46 | 0.48 | 0.51 | 0.54 | 0.50 | 0.47 | 0.44 | 0.43 | 0.39 |
| Inventory Turnover | 76.14 | 76.14 | 93.64 | 59.48 | 26.35 | 16.74 | 19.81 | 24.32 | 20.80 | 14.41 | 15.71 |
| Days Sales Outstanding | — | 88.96 | 90.57 | 84.76 | 83.86 | 81.48 | 82.61 | 81.70 | 85.63 | 87.58 | 84.78 |
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Dividend Yield | 0.7% | 1.0% | 0.6% | 0.7% | 0.8% | 0.9% | 0.8% | 1.0% | 1.3% | 1.7% | 2.2% |
| Payout Ratio | 19.8% | 19.8% | 23.6% | 24.7% | 27.4% | 24.9% | 27.0% | 34.2% | 35.2% | 76.6% | 46.5% |
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Yield | 3.6% | 4.8% | 2.7% | 2.6% | 2.8% | 3.8% | 3.0% | 2.8% | 3.8% | 2.2% | 4.7% |
| FCF Yield | 1.8% | 2.4% | 1.9% | 2.2% | 2.3% | 3.4% | 2.7% | 2.9% | 3.7% | 4.2% | 5.8% |
| Buyback Yield | 0.6% | 0.8% | 0.5% | 0.5% | 0.9% | 1.7% | 1.3% | 1.5% | 1.9% | 1.4% | 2.2% |
| Total Shareholder Yield | 1.3% | 1.8% | 1.1% | 1.2% | 1.7% | 2.6% | 2.1% | 2.4% | 3.2% | 3.0% | 4.4% |
| Shares Outstanding | — | $7.5B | $7.5B | $7.5B | $7.5B | $7.5B | $7.6B | $7.7B | $7.8B | $7.8B | $7.8B |
Includes 30+ ratios · 30 years · Updated daily
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Quick answers to the most common questions about buying MSFT stock.
Microsoft Corporation's current P/E ratio is 27.7x. The historical average is 30.8x. This places it at the 50th percentile of its historical range.
Microsoft Corporation's current EV/EBITDA is 19.6x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 20.4x.
Microsoft Corporation's return on equity (ROE) is 34.0%. This is above the typical threshold of 15-20% considered good for most companies. The historical average is 31.8%.
Based on historical data, Microsoft Corporation is trading at a P/E of 27.7x. This is at the 50th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
Microsoft Corporation's current dividend yield is 0.71% with a payout ratio of 19.8%.
Microsoft Corporation has 67.9% gross margin and 46.8% operating margin. Operating margin above 20% indicates strong pricing power and cost efficiency.
Microsoft Corporation's Debt/EBITDA ratio is 0.7x, indicating low leverage. A ratio below 2x is generally considered financially healthy.
Key Metrics
Top Statement Risk
AI capex margin compression
Metrics are mathematically derived from official filings.
Margin Resilience Amid AI Mix Shift
Gross margin slipped to 67.2% in 2026Q4 from 70.1% in 2024Q3, per financial statements, yet operating margin expanded to 45.1%, reflecting disciplined expense control and operating leverage.
The 290 basis point gross margin erosion is consistent with the dilutive impact of AI infrastructure and lower-margin hardware, but the operating margin's rise to 45.1% from 43.1% over the same period indicates that revenue growth is outpacing operating expense growth. This suggests that the company is successfully managing the cost structure despite the mix shift, though investors should monitor whether the gross margin decline accelerates as AI compute intensity rises.
ROIC Stability Masks Capital Intensity
ROIC has held near 6% over ten quarters, per reported figures, despite a 56.6% surge in total assets, implying that the massive AI capex is not yet generating incremental returns.
ROIC remained range-bound between 5.8% and 6.5% even as net PPE ballooned to 44.5% of total assets, per the balance sheet. This suggests that the capital deployed into AI infrastructure is not yet translating into proportional profit growth, which may indicate a period of 'capacity ahead of demand.' The stability of ROIC is notable, but the declining asset turnover (from 0.13 to 0.12) implies that the efficiency of capital deployment is weakening, warranting close monitoring of whether Azure growth can reaccelerate to justify the investment.
Negative CCC Reflects Supplier Leverage
Cash conversion cycle improved to -48 days in 2026Q4 from -16 days in 2024Q3, per financial statements, driven by extended payables and minimal inventory, underscoring strong working capital management.
The negative CCC is a hallmark of Microsoft's business model, as it collects cash from customers before paying suppliers, effectively using supplier financing to fund operations. DPO extended to 123 days from 88 days over the period, while DSO remained stable around 71 days, indicating that the company is stretching payables without straining supplier relationships. This efficiency contributes to robust cash generation, but the trend may face limits as suppliers push back on longer payment terms.
Conservative Leverage Despite Debt Rise
Debt-to-equity fell to 0.29 in 2026Q4 from 0.42 in 2024Q3, per balance sheet data, while interest coverage improved to 53.5x, indicating ample capacity to service debt even as absolute debt rose.
Total debt increased to $128.8B, but equity grew faster, driven by retained earnings, which more than offset the debt increase. Interest coverage of 53.5x is exceptionally strong, suggesting that debt service is not a concern. However, the rising absolute debt and the shift to an asset-heavy model imply that future financing needs may grow, and investors should monitor whether the company maintains its conservative leverage profile as AI capex continues.
Thinner Cash Buffer but Adequate Liquidity
Current ratio dipped to 1.23 in 2026Q4 from 1.24 a year earlier, per balance sheet data, while cash dropped to $20.9B, indicating a thinner but still sufficient liquidity cushion.
The current ratio remains above 1.0, and the quick ratio of 1.22 suggests that inventory is not a significant liquidity concern. However, the decline in cash and the surge in capex to 39.8% of revenue imply that the company is increasingly reliant on operating cash flow to fund investments. Under a severe stress scenario, the fortress balance sheet and strong cash conversion would likely provide a buffer, but the reduced cash position warrants monitoring.
Misapplied ROE in Asset-Heavy Transition
ROE of 8.3% in 2026Q4, per reported figures, understates Microsoft's earning power because it ignores the massive cash and investment portfolio, making it a misleading metric for this business model.
ROE is often used to compare tech giants, but for Microsoft, it is distorted by the company's large cash pile and the recent shift to an asset-heavy model. A more appropriate measure is ROIC, which accounts for the capital employed in the business, or cash-based returns like CFO/Invested Capital. The current ROE of 8.3% is low relative to peers like Apple (137.2%) and Alphabet (50.8%), but this gap is largely due to Microsoft's conservative capital structure and substantial cash reserves, not operational underperformance. Investors should focus on ROIC and cash flow returns to assess true value creation.