Microsoft Corporation (MSFT) Stock Analysis — Graham Number, Scorecard & Financials

NASDAQ · Technology

Microsoft Corporation

MSFT · Software - Infrastructure

$414.87

▲ 0.67 (0.16%)

Data cached · refreshes every 10 min

Mr. Market is currently offering Microsoft Corporation at $414.87.

The business passes 4 of 7 of Graham's defensive criteria — adequate but not exceptional.

Overall Grade

Defensive

Enterprising

Profitability A

Gross Profit Margin 68.8%

Operating Margin 45.6%

Net Income Margin 36.1%

Fin. Health A

Years to Pay Off Debt 0.6 yrs

Working Capital vs Long-Term Debt $9.8B

Working Capital $49.9B

Valuation F

Margin of Safety 0.0%

Price-to-Book 8.97x

Cash Flow C

Free Cash Flow $71.6B

CapEx % of Net Income 63.4%

Owner Earnings $200.5B

4/7

Graham Score

Enterprising

Defensive — Graham's strict criteria (P/B, P/E, dividends, stability) · Enterprising — Profitability & cash flow focused, accepts higher valuations for quality

Market Data

Market Cap $3,081.8B

Enterprise Value $3,125.8B

P/E (TTM) 24.72

Dividend Yield 0.86%

Exchange NASDAQ

Key Margins

Gross Profit 68.8%

Operating Margin 45.6%

Net Margin 36.1%

Company Info

Sector Technology

Industry Software - Infrastructure

Employees 228000

Country United States

Visit website

📖

Full Graham Analysis

Mr. Market is currently offering Microsoft Corporation at $414.87.

The business passes 4 of 7 of Graham's defensive criteria — adequate but not exceptional.

At $414.87, the stock trades at a 248% premium to its Graham Number of $119.12. Graham would consider this price speculative.

There is no margin of safety at the current price. Graham would advise patience and waiting for a better entry point.

Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign..

Conclusion: This stock is better suited for Graham's Enterprising investor — one willing to devote time and skill to security selection.

About Microsoft Corporation

Microsoft Corporation develops and supports software, services, devices, and solutions worldwide. The Productivity and Business Processes segment offers Microsoft 365 commercial, enterprise mobility + security, windows commercial, power BI, exchange, sharepoint, Microsoft teams, security and compliance, and copilot; Microsoft 365 commercial products, such as Windows commercial on-premises and office licensed services; Microsoft 365 consumer products and cloud services, including Microsoft 365 consumer subscriptions, office licensed on-premises, and other consumer services; LinkedIn; dynamics products and cloud services, such as dynamics 365, cloud-based applications, and on-premises ERP and CRM applications. Its Intelligent Cloud segment provides Server products and cloud services comprising Azure and other cloud services, GitHub, Nuance Healthcare, virtual desktop offerings, and other cloud services; server products, including SQL and windows server, visual studio and system center related client access licenses, and other on-premises offerings; enterprise and partner services, such as enterprise support and nuance professional services, industry solutions, Microsoft partner network, and learning experience. The Personal Computing segment provides windows and devices, such as Windows OEM licensing and devices and surface and PC accessories; gaming services and solutions, such as Xbox hardware, content, and services, first- and third-party content Xbox game pass, subscriptions, and cloud gaming, advertising, and other cloud services; search and news advertising services that includes Bing and Copilot, Microsoft News and Edge, and third-party affiliates. It sells its products through OEMs, distributors, and resellers; and online and retail stores. The company was founded in 1975 and is headquartered in Redmond, Washington.

Showing Key Metrics

Income Highlights

Metric	2025	2024	2023	2022
Gross Profit %	68.8% ▼	69.8%	68.9%	68.4%
Operating Margin %	45.6% ▲	44.6%	41.8%	42.1%
Net Income %	36.1% ▲	36.0%	34.1%	36.7%
Diluted EPS	13.64 ▲	11.80	9.68	9.65

Balance Sheet Highlights

Metric	2025	2024	2023	2022	2021
Total Assets	$619.0B	$512.2B	$412.0B	$364.8B	N/A
Total Debt	$60.6B ↓	$67.1B	$60.0B	$61.3B	N/A
Working Capital	$49.9B ▲	$34.4B	$80.1B	$74.6B	N/A
Years to Pay Debt	0.59	0.76	0.83	0.84	N/A

Cash Flow Highlights

Metric	2025	2024	2023	2022	2021
Free Cash Flow	$71.6B ▼	$74.1B	$59.5B	$65.1B	N/A
Owner Earnings	$200.5B	$154.9B	$114.3B	$111.1B	N/A
CapEx % of Net Income	63.4%	50.5%	38.8%	32.8%	N/A

Income Statement

	2025	2024	2023	2022
Tax Effect Of Unusual Items	-77,088	-99,918	-2,850	43,754
Tax Rate For Calcs	0	0	0	0
Normalized EBITDA	160,603,000	133,558,000	105,155,000	99,905,000
Total Unusual Items	-438,000	-549,000	-15,000	334,000
Total Unusual Items Excluding Goodwill	-438,000	-549,000	-15,000	334,000
Net Income From Continuing Operation Net Minority Interest	101,832,000	88,136,000	72,361,000	72,738,000
Reconciled Depreciation	34,153,000	22,287,000	13,861,000	14,460,000
Reconciled Cost Of Revenue	87,831,000	74,114,000	65,863,000	62,650,000
EBITDA	160,165,000	133,009,000	105,140,000	100,239,000
EBIT	126,012,000	110,722,000	91,279,000	85,779,000
Net Interest Income	262,000	222,000	1,026,000	31,000
Interest Expense	2,385,000	2,935,000	1,968,000	2,063,000
Interest Income	2,647,000	3,157,000	2,994,000	2,094,000
Normalized Income	102,192,912	88,585,082	72,373,150	72,447,754
Net Income From Continuing And Discontinued Operation	101,832,000	88,136,000	72,361,000	72,738,000
Total Expenses	153,196,000	135,689,000	123,392,000	114,887,000
Total Operating Income As Reported	128,528,000	109,433,000	88,523,000	83,383,000
Diluted Average Shares	7,465,000	7,469,000	7,472,000	7,540,000
Basic Average Shares	7,433,000	7,431,000	7,446,000	7,496,000
Diluted EPS	0	0	0	0
Basic EPS	0	0	0	0
Diluted NI Availto Com Stockholders	101,832,000	88,136,000	72,361,000	72,738,000
Net Income Common Stockholders	101,832,000	88,136,000	72,361,000	72,738,000
Net Income	101,832,000	88,136,000	72,361,000	72,738,000
Net Income Including Noncontrolling Interests	101,832,000	88,136,000	72,361,000	72,738,000
Net Income Continuous Operations	101,832,000	88,136,000	72,361,000	72,738,000
Tax Provision	21,795,000	19,651,000	16,950,000	10,978,000
Pretax Income	123,627,000	107,787,000	89,311,000	83,716,000
Other Income Expense	-5,163,000	-1,868,000	-238,000	302,000
Other Non Operating Income Expenses	-4,725,000	-1,319,000	-223,000	-32,000
Special Income Charges	-943,000	-206,000	-30,000	-101,000
Write Off	943,000	206,000	30,000	101,000
Gain On Sale Of Security	505,000	-343,000	15,000	435,000
Net Non Operating Interest Income Expense	262,000	222,000	1,026,000	31,000
Interest Expense Non Operating	2,385,000	2,935,000	1,968,000	2,063,000
Interest Income Non Operating	2,647,000	3,157,000	2,994,000	2,094,000
Operating Income	128,528,000	109,433,000	88,523,000	83,383,000
Operating Expense	65,365,000	61,575,000	57,529,000	52,237,000
Research And Development	32,488,000	29,510,000	27,195,000	24,512,000
Selling General And Administration	32,877,000	32,065,000	30,334,000	27,725,000
Selling And Marketing Expense	25,654,000	24,456,000	22,759,000	21,825,000
General And Administrative Expense	7,223,000	7,609,000	7,575,000	5,900,000
Other Gand A	7,223,000	7,609,000	7,575,000	5,900,000
Gross Profit	193,893,000	171,008,000	146,052,000	135,620,000
Cost Of Revenue	87,831,000	74,114,000	65,863,000	62,650,000
Total Revenue	281,724,000	245,122,000	211,915,000	198,270,000
Operating Revenue	281,724,000	245,122,000	211,915,000	198,270,000

Balance Sheet

	2025	2024	2023	2022	2021
Ordinary Shares Number	7,434,159	7,434,139	7,432,000	7,464,000
Share Issued	7,434,159	7,434,139	7,432,000	7,464,000
Net Debt	12,909,000	33,315,000	12,533,000	35,850,000
Total Debt	60,588,000	67,127,000	59,965,000	61,270,000
Tangible Book Value	201,366,000	121,660,000	128,971,000	87,720,000
Invested Capital	386,630,000	320,107,000	253,460,000	216,323,000
Working Capital	49,913,000	34,448,000	80,108,000	74,602,000
Net Tangible Assets	201,366,000	121,660,000	128,971,000	87,720,000
Capital Lease Obligations	17,437,000	15,497,000	12,728,000	11,489,000
Common Stock Equity	343,479,000	268,477,000	206,223,000	166,542,000
Total Capitalization	383,631,000	311,165,000	248,213,000	213,574,000
Total Equity Gross Minority Interest	343,479,000	268,477,000	206,223,000	166,542,000
Stockholders Equity	343,479,000	268,477,000	206,223,000	166,542,000
Gains Losses Not Affecting Retained Earnings	-3,347,000	-5,590,000	-6,343,000	-4,678,000
Other Equity Adjustments	-3,347,000	-5,590,000	-6,343,000	-4,678,000
Retained Earnings	237,731,000	173,144,000	118,848,000	84,281,000
Capital Stock	109,095,000	100,923,000	93,718,000	86,939,000
Common Stock	109,095,000	100,923,000	93,718,000	86,939,000
Total Liabilities Net Minority Interest	275,524,000	243,686,000	205,753,000	198,298,000
Total Non Current Liabilities Net Minority Interest	134,306,000	118,400,000	101,604,000	103,216,000
Other Non Current Liabilities	45,186,000	27,064,000	17,981,000	15,526,000
Tradeand Other Payables Non Current	25,986,000	27,931,000	25,560,000	26,069,000
Non Current Deferred Liabilities	5,545,000	5,220,000	3,345,000	3,100,000
Non Current Deferred Revenue	2,710,000	2,602,000	2,912,000	2,870,000
Non Current Deferred Taxes Liabilities	2,835,000	2,618,000	433,000	230,000
Long Term Debt And Capital Lease Obligation	57,589,000	58,185,000	54,718,000	58,521,000
Long Term Capital Lease Obligation	17,437,000	15,497,000	12,728,000	11,489,000
Long Term Debt	40,152,000	42,688,000	41,990,000	47,032,000
Current Liabilities	141,218,000	125,286,000	104,149,000	95,082,000
Other Current Liabilities	25,020,000	19,185,000	14,745,000	13,067,000
Current Deferred Liabilities	64,555,000	57,582,000	50,901,000	45,538,000
Current Deferred Revenue	64,555,000	57,582,000	50,901,000	45,538,000
Current Debt And Capital Lease Obligation	2,999,000	8,942,000	5,247,000	2,749,000
Current Debt	2,999,000	8,942,000	5,247,000	2,749,000
Other Current Borrowings	2,999,000	2,249,000	5,247,000
Commercial Paper	0	6,693,000	0
Pensionand Other Post Retirement Benefit Plans Current	13,709,000	12,564,000	11,009,000	10,661,000
Payables And Accrued Expenses	34,935,000	27,013,000	22,247,000	23,067,000
Payables	34,935,000	27,013,000	22,247,000	23,067,000
Total Tax Payable	7,211,000	5,017,000	4,152,000	4,067,000
Income Tax Payable	7,211,000	5,017,000	4,152,000	4,067,000
Accounts Payable	27,724,000	21,996,000	18,095,000	19,000,000
Total Assets	619,003,000	512,163,000	411,976,000	364,840,000
Total Non Current Assets	427,872,000	352,429,000	227,719,000	195,156,000
Other Non Current Assets	40,565,000	36,460,000	30,601,000	21,897,000
Financial Assets	272,000	0	0	0
Investments And Advances	15,133,000	14,600,000	9,879,000	6,891,000
Investmentin Financial Assets	2,460,000	1,500,000	0	0
Available For Sale Securities	2,460,000	1,500,000
Long Term Equity Investment	12,673,000	13,100,000	9,879,000	6,891,000
Goodwill And Other Intangible Assets	142,113,000	146,817,000	77,252,000	78,822,000
Other Intangible Assets	22,604,000	27,597,000	9,366,000	11,298,000
Goodwill	119,509,000	119,220,000	67,886,000	67,524,000
Net PPE	229,789,000	154,552,000	109,987,000	87,546,000
Accumulated Depreciation	-93,653,000	-76,421,000	-68,251,000	-59,660,000
Gross PPE	323,442,000	230,973,000	178,238,000	147,206,000
Leases	12,117,000	9,594,000	8,537,000	7,819,000
Other Properties	24,823,000	18,961,000	14,346,000	13,148,000
Machinery Furniture Equipment	139,243,000	100,312,000	81,207,000	66,491,000
Buildings And Improvements	137,921,000	93,943,000	68,465,000	55,014,000
Land And Improvements	9,338,000	8,163,000	5,683,000	4,734,000
Current Assets	191,131,000	159,734,000	184,257,000	169,684,000
Other Current Assets	25,723,000	26,021,000	21,807,000	16,924,000
Hedging Assets Current	10,000	12,000	6,000	8,000
Inventory	938,000	1,246,000	2,500,000	3,742,000
Finished Goods		845,000	1,768,000	2,516,000	1,367,000
Work In Process		7,000	23,000	82,000	79,000
Raw Materials		394,000	709,000	1,144,000	1,190,000
Receivables	69,905,000	56,924,000	48,688,000	44,261,000
Accounts Receivable	69,905,000	56,924,000	48,688,000	44,261,000
Allowance For Doubtful Accounts Receivable	-944,000	-830,000	-650,000	-633,000
Gross Accounts Receivable	70,849,000	57,754,000	49,338,000	44,894,000
Cash Cash Equivalents And Short Term Investments	94,555,000	75,531,000	111,256,000	104,749,000
Other Short Term Investments	64,313,000	57,216,000	76,552,000	90,818,000
Cash And Cash Equivalents	30,242,000	18,315,000	34,704,000	13,931,000
Cash Equivalents	18,531,000	6,744,000	26,226,000	5,673,000
Cash Financial	11,711,000	11,571,000	8,478,000	8,258,000

Cash Flow

	2025	2024	2023	2022	2021
Free Cash Flow	71,611,000	74,071,000	59,475,000	65,149,000
Repurchase Of Capital Stock	-18,420,000	-17,254,000	-22,245,000	-32,696,000
Repayment Of Debt	-3,216,000	-29,070,000	-2,750,000	-9,023,000
Issuance Of Debt	0	24,395,000	0	0
Issuance Of Capital Stock	2,056,000	2,002,000	1,866,000	1,841,000
Capital Expenditure	-64,551,000	-44,477,000	-28,107,000	-23,886,000
End Cash Position	30,242,000	18,315,000	34,704,000	13,931,000
Beginning Cash Position	18,315,000	34,704,000	13,931,000	14,224,000
Effect Of Exchange Rate Changes	63,000	-210,000	-194,000	-141,000
Changes In Cash	11,864,000	-16,179,000	20,967,000	-152,000
Financing Cash Flow	-51,699,000	-37,757,000	-43,935,000	-58,876,000
Cash Flow From Continuing Financing Activities	-51,699,000	-37,757,000	-43,935,000	-58,876,000
Net Other Financing Charges	-2,291,000	-1,309,000	-1,006,000	-863,000
Cash Dividends Paid	-24,082,000	-21,771,000	-19,800,000	-18,135,000
Common Stock Dividend Paid	-24,082,000	-21,771,000	-19,800,000	-18,135,000
Net Common Stock Issuance	-16,364,000	-15,252,000	-20,379,000	-30,855,000
Common Stock Payments	-18,420,000	-17,254,000	-22,245,000	-32,696,000
Common Stock Issuance	2,056,000	2,002,000	1,866,000	1,841,000
Net Issuance Payments Of Debt	-8,962,000	575,000	-2,750,000	-9,023,000
Net Short Term Debt Issuance	-5,746,000	5,250,000	0	0
Short Term Debt Issuance		5,250,000	0	0
Net Long Term Debt Issuance	-3,216,000	-4,675,000	-2,750,000	-9,023,000
Long Term Debt Payments	-3,216,000	-29,070,000	-2,750,000	-9,023,000
Long Term Debt Issuance	0	24,395,000	0	0
Investing Cash Flow	-72,599,000	-96,970,000	-22,680,000	-30,311,000
Cash Flow From Continuing Investing Activities	-72,599,000	-96,970,000	-22,680,000	-30,311,000
Net Other Investing Changes	2,317,000	-1,298,000	-3,116,000	-2,825,000
Net Investment Purchase And Sale	-4,387,000	17,937,000	10,213,000	18,438,000
Sale Of Investment	25,388,000	35,669,000	47,864,000	44,894,000
Purchase Of Investment	-29,775,000	-17,732,000	-37,651,000	-26,456,000
Net Business Purchase And Sale	-5,978,000	-69,132,000	-1,670,000	-22,038,000
Purchase Of Business	-5,978,000	-69,132,000	-1,670,000	-22,038,000
Net PPE Purchase And Sale	-64,551,000	-44,477,000	-28,107,000	-23,886,000
Purchase Of PPE	-64,551,000	-44,477,000	-28,107,000	-23,886,000
Operating Cash Flow	136,162,000	118,548,000	87,582,000	89,035,000
Cash Flow From Continuing Operating Activities	136,162,000	118,548,000	87,582,000	89,035,000
Change In Working Capital	-5,350,000	1,824,000	-2,388,000	446,000
Change In Other Working Capital	5,400,000	7,035,000	5,177,000	5,805,000
Change In Other Current Liabilities	4,947,000	5,616,000	2,825,000	3,169,000
Change In Other Current Assets	-5,994,000	-8,465,000	-4,824,000	-3,514,000
Change In Payables And Accrued Expense	569,000	3,545,000	-2,721,000	2,943,000
Change In Payable	569,000	3,545,000	-2,721,000	2,943,000
Change In Account Payable	569,000	3,545,000	-2,721,000	2,943,000
Change In Tax Payable		1,687,000	-358,000	696,000	-2,309,000
Change In Income Tax Payable		1,687,000	-358,000	696,000	-2,309,000
Change In Inventory	309,000	1,284,000	1,242,000	-1,123,000
Change In Receivables	-10,581,000	-7,191,000	-4,087,000	-6,834,000
Changes In Account Receivables	-10,581,000	-7,191,000	-4,087,000	-6,834,000
Stock Based Compensation	11,974,000	10,734,000	9,611,000	7,502,000
Unrealized Gain Loss On Investment Securities	-536,000	-146,000	-303,000	-509,000
Asset Impairment Charge	943,000	206,000	30,000	101,000
Deferred Tax	-7,056,000	-4,738,000	-6,059,000	-5,702,000
Deferred Income Tax	-7,056,000	-4,738,000	-6,059,000	-5,702,000
Depreciation Amortization Depletion	34,153,000	22,287,000	13,861,000	14,460,000
Depreciation And Amortization	34,153,000	22,287,000	13,861,000	14,460,000
Depreciation	34,153,000	22,287,000	13,861,000	14,460,000
Operating Gains Losses	202,000	245,000	469,000	-1,000
Gain Loss On Investment Securities	202,000	245,000	469,000	-1,000
Net Income From Continuing Operations	101,832,000	88,136,000	72,361,000	72,738,000

These metrics estimate what Microsoft Corporation is worth based on its fundamentals — independent of what the market currently prices it at. Graham's Fair Value and NCAV are conservative floors rooted in 1930s–60s principles. EPV assumes zero growth. None are price targets — they are reference points for judging whether the current price offers a margin of safety.

Graham's Fair Value

$119.12

Margin of Safety

Market Cap ÷ Company Value

1.12

P/B Ratio

8.97

Warren's Owner Earnings

$200.5B

Latest fiscal year

Graham's 7 Criteria

Defensive Investor Checklist

4/7 — Enterprising Investor

✅ Adequate Size

$281.7B

vs > $1.5B revenue

❌ Strong Financial Condition

1.35x

vs Current Ratio > 2.0x

✅ Earnings Stability

No loss years (4 yrs data)

vs No negative EPS years

✅ Dividend Record

0.86%

vs Uninterrupted dividends

✅ Earnings Growth

+41.3% EPS growth

vs > 33% EPS growth

❌ Moderate P/E Ratio

24.7x

vs P/E ≤ 15.0x

❌ Moderate Price-to-Book

8.97x P/B (P/E×P/B: 221.8)

vs P/B ≤ 1.5x | P/E × P/B ≤ 22.5

Net Current Asset Value

$-11.36

Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign.

"Buy at two-thirds of net current assets." — Graham

Earnings Power Value

$192.25

Per share, no-growth floor. Compare to current price.

Cash Flow Analysis

Metric	2025	2024	2023	2022	2021
Capital Expenditure % of Net Income	63.4%	50.5%	38.8%	32.8%	N/A
Repurchase of Capital Stock	-$18.4B	-$17.3B	-$22.2B	-$32.7B	N/A
Free Cash Flow	$71.6B ▼	$74.1B ▲	$59.5B ▼	$65.1B •	N/A •
Warren's Owner Earnings	$200.5B	$154.9B	$114.3B	$111.1B	N/A

Peers & Industry

No auto-detected peers for Software - Infrastructure. You can manually compare MSFT against any stock using the Compare tool.

"The management of a business is its most important single factor — more important than market position, patents, or financial structure."

— Benjamin Graham

Capital Allocation & Alignment

Insider Ownership

0.08%

Low — management has little skin in the game

Return on Equity (ROE)

29.6%

Excellent — management generates strong returns on equity

Return on Assets (ROA)

16.5%

Strong — management uses assets efficiently

Share Buybacks (Latest Year)

$18.4B

Management is returning capital to shareholders via buybacks

Debt Trend YoY

-9.7% YoY

Debt is declining — management is deleveraging

Leadership Team

Satya Nadella

Chairman & CEO

Age 58

Pay: $12,251,294

0.012% of net income

Bradford Smith LCA

President & Vice Chairman

Age 66

Pay: $4,532,750

0.004% of net income

Amy Hood

Executive VP & CFO

Age 53

Pay: $4,444,191

0.004% of net income

Judson Althoff

Executive VP & CEO of Commercial Business

Age 51

Pay: $4,490,115

0.004% of net income

Carolina Dybeck Happe

Executive VP & COO

Age 53

Top Institutional Holders

Institution	% Owned	Shares
Vanguard Group Inc	9.67%	717,942,580
Blackrock Inc.	8.11%	601,897,495
State Street Corporation	4.12%	306,150,608
FMR, LLC	2.71%	200,948,745
Geode Capital Management, LLC	2.46%	182,618,400
JPMORGAN CHASE & CO	1.99%	147,759,850
Price (T.Rowe) Associates Inc	1.69%	125,709,121
Morgan Stanley	1.63%	121,220,561

Risk Analysis

Beta (Market Risk)

1.09

Moderate volatility — moves slightly more than market

Short Interest

1.1% of float

Low short interest — market is not heavily bearish

Debt-to-Equity

0.30x

Conservative balance sheet — low financial risk

Current Ratio

1.28x

Adequate liquidity

52-Week Price Range

Low: $356.28 Current: $414.87 High: $555.45

Currently at 29% of 52-week range

360investing

Microsoft Corporation

Metric Explanations

Full Graham Analysis

About Microsoft Corporation

Income Highlights

Balance Sheet Highlights

Cash Flow Highlights

Graham's Fair Value

Warren's Owner Earnings

Graham's 7 Criteria

Graham's 7 Criteria — Explained

Net Current Asset Value

Earnings Power Value

Cash Flow Analysis

Peers & Industry

Capital Allocation & Alignment

Leadership Team

Top Institutional Holders

Risk Analysis