At the moment, the debt-to-equity of Microsoft Corporation (NASDAQ:MSFT) is high, standing at 97.37, a figure that is higher than the 25.94 average recorded by the industry. This means that the company is currently holding a debt level at 78.38 B. MSFT shares have a strong debt-to-equity ratio but their quick ratio which reads 3.10 is strong and might cause problems for them later in the future.
Even though there was a rise of +12.06% in revenue, the company failed to succeed in outperforming the industry average of 13.20%. The 13.11% yoy growth of MSFT’s revenue has gone up that of the industry average by 7.68%. For the past 12 months, Microsoft Corporation revenue has gone up by 5.43%. The sustained growth in their revenue has helped boost their earnings per share.
Microsoft Corporation (MSFT) has seen their earnings per share increased to $1.08 during the last quarter in comparison to the same quarter last year. They have recorded a -4.60% declining earnings per share earnings. They have recorded a -4.60% declining earnings per share earnings. Analysts expect increase in earnings is also on the cards next quarter with an average estimate at $1.09. In the fiscal year 2018, Microsoft Corporation overcame its bottom line by hitting earning $2.13 per share compared to the $3.25 in 2017.
The 12-month return on equity has significantly fallen to 29.37 in comparison to the same data for other companies in the same industry. This shows that there is a major weakness within the organization over the past one year. Comparing them to other companies in the industry and the overall Technology sector, the industry average is 15.48 while 13.93 is of the sector.
MSFT total operating cash flow had dropped to $8.9 billion compared to $13.66 billion in the same quarter last year. Also, looking at the price to cash flow of the company and the industry average, the 19.52 ratio of the stock is lower than the industry’s 27.10.
Microsoft Corporation (NASDAQ:MSFT) has a price-to-earnings ratio of 28.06 which is lower than the 34.27 industry average at the moment. In addition to their unfavorable P/E ratio, Microsoft Corporation has maintained a gross margin of 61.91. This shows whether the company has what it takes to effectively turn the revenue into profit.
The company’s ROA is 9.76 when compared to 9.27 for the stocks operating in the same industry. This can be attributed to the strength recorded in the net income produced by total assets. Comparing it to other companies in the sector, Microsoft Corporation ROE is above 13.93 that of both the sector average.
The operating profit margin for Microsoft Corporation (MSFT) is 24.76%, a figure which is considered to be weak. It has gone 16.89 from the 26.37 over the past 5 years. In addition to this, their operating margin is 7.87 higher than the industry average.
The net profit margin which stood at 21.71 on average in the past 5 years has jumped to 23.57 in the last 12 months. Added to that, this ratio has surpassed the industry net margin that stands at 11.70.
Analysts meanwhile rate Microsoft Corporation (NASDAQ:MSFT) as a strong buy. Still some above discussed indicators of the $879.16B company show strength while others show weakness. There is little evidence at the moment to justify the expectation of the MSFT shares to either perform positively or negatively when compared to other stocks. The primary strengths of Microsoft Corporation can be witnessed in its increased revenue, growing earnings per share, higher return on equity, increased operating cash and high net margin. Subsequently, financial analysis have also identified some weak areas that includes high debt, relatively high P/E ratio, lower return on assets and low net margin.