Latest Ratios: P/E Ratio 28.5x · EV/EBITDA 18.3x · ROE 33.3%. (1996–2025 historical series)
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $2.89T | $3.71T | $3.34T | $2.54T | $1.94T | $2.06T | $1.56T | $1.04T | $768.6B | $539.9B | $410.0B |
| Enterprise Value | $2.97T | $3.80T | $3.42T | $2.59T | $2.00T | $2.13T | $1.63T | $1.11T | $844.1B | $627.7B | $457.8B |
| P/E Ratio → | 28.51 | 36.47 | 37.88 | 35.18 | 26.61 | 33.65 | 35.33 | 26.47 | 46.30 | 21.21 | 24.37 |
| P/S Ratio | 10.25 | 13.18 | 13.62 | 12.01 | 9.77 | 12.26 | 10.93 | 8.25 | 6.96 | 5.59 | 4.50 |
| P/B Ratio | 8.45 | 10.81 | 12.43 | 12.34 | 11.63 | 14.52 | 13.22 | 10.15 | 9.29 | 6.15 | 5.70 |
| P/FCF | 40.34 | 51.85 | 45.07 | 42.78 | 29.72 | 36.73 | 34.57 | 27.15 | 23.83 | 17.21 | 16.41 |
| P/OCF | 21.21 | 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
Enterprise-value multiples — capital-structure-neutral measures of total business value
| 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 | 18.26 | 23.33 | 25.95 | 25.29 | 20.45 | 26.09 | 24.82 | 20.38 | 18.63 | 16.61 | 14.00 |
| EV / EBIT | 23.11 | 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 |
Margins and return-on-capital ratios measuring operating efficiency
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% |
| 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% |
Solvency and debt-coverage ratios — lower is generally safer
| 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 |
Short-term solvency ratios and asset-utilisation metrics
| 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 |
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 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% |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Yield | 3.5% | 2.7% | 2.6% | 2.8% | 3.8% | 3.0% | 2.8% | 3.8% | 2.2% | 4.7% | 4.1% |
| FCF Yield | 2.5% | 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 | 1.5% | 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 |
AI Infrastructure Capital Intensity
According to current market data, Microsoft trades at a forward P/E of 22.20, which, when compared to its historical averages and peer group, suggests that investors are pricing in a significant long-term growth premium tied to the successful monetization of its generative AI and cloud infrastructure initiatives.
The current P/E multiple appears to imply that the market expects sustained double-digit earnings growth, potentially discounting the near-term margin pressure caused by massive capital expenditures. Investors should monitor whether the company's ability to scale AI-driven revenue can justify this valuation premium relative to lower-multiple peers in the broader software infrastructure space.
Based on reported financial figures, Microsoft's ROIC has trended toward 6.2% in 2026Q3, a level that warrants further investigation as the company's massive investment in data center assets temporarily dilutes the efficiency of its capital base compared to its historical performance in more software-centric periods.
The decline in ROIC suggests that the company is currently in a heavy investment phase where the denominator of the ratio is expanding faster than the immediate incremental returns. This trend may indicate a structural shift toward a more capital-intensive business model, requiring investors to assess whether these investments will eventually yield superior long-term compounding returns.
As reported in recent quarterly filings, Microsoft's cash conversion cycle reached -58 days in 2026Q3, demonstrating the company's continued ability to leverage its massive scale to extract favorable payment terms from suppliers while maintaining efficient collection cycles from its diverse enterprise customer base.
The negative cash conversion cycle serves as a structural advantage, effectively providing the company with interest-free financing from its operations. This efficiency is critical for funding ongoing R&D and infrastructure projects, suggesting that the company's operational leverage remains a core pillar of its financial strength despite the recent increase in capital intensity.
Based on an analysis of the company's business model, the P/E ratio is frequently misapplied as a primary valuation metric, as it fails to account for the significant non-cash depreciation expenses associated with the company's massive, ongoing investments in global data center infrastructure and AI-ready hardware.
Investors should instead focus on EV/EBITDA or P/FCF, which better capture the cash-generative capacity of the business by neutralizing the impact of accounting-based depreciation schedules. Relying solely on P/E may obscure the true underlying profitability of the cloud segment, as the company's aggressive capital spending cycle artificially suppresses reported net income.
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 28.5x. The historical average is 31.2x. This places it at the 47th percentile of its historical range.
Microsoft Corporation's current EV/EBITDA is 18.3x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 20.6x.
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%.
Based on historical data, Microsoft Corporation is trading at a P/E of 28.5x. This is at the 47th 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 0.83% with a payout ratio of 23.6%.
Microsoft Corporation has 68.8% gross margin and 45.6% 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.