MSFTMicrosoft Corporation
Is the business good?
A genuinely good business: earnings fully cash-backed (1.5×), margins widening, and elite returns on assets.
Mixed fundamental signals. Nine pass/fail tests of year-over-year health from the filings.
Operating profit is fully backed by cash. Conversion is improving vs a year ago.
Positive operating leverage, operating profit is growing faster than sales, so margins widen as the business scales.
High-quality, exceptional returns on the assets themselves, not leverage. ROE 30% = margin × turnover × leverage.
Unless marked, from derived.
Against the whole market›
Percentile against every name Ryufin tracks. Higher is better; the tick marks the middle of the market. Context, not one of the checks above.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is MSFT?
Microsoft Corporation earns 30% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 21 points above what the capital costs: growth creates value
- Operating margin
- 47%
Operating margin · Software - Infrastructure median 7.5% · 12 months to Q4 2026
- Cash conversion
- 1.46×
Cash conversion · 1.29× a year ago · operating cash flow covers the operating profit after tax
- R&D as % of revenue
- 11%
R&D as % of revenue
| Year | Operating margin |
|---|---|
| FY2021 | 42% |
| FY2022 | 42% |
| FY2023 | 42% |
| FY2024 | 45% |
| FY2025 | 46% |
| FY2026 | 47% |
Details›
- Gross margin12 months to Q4 2026
- 68%
- Operating margin12 months to Q4 2026
- 47%
- Net margin12 months to Q4 2026
- 40%
- Free cash flow margin
- 20%
- R&D as % of revenue
- 11%
- Revenue, trailing twelve months
- $331.8B
- Free cash flow, trailing twelve months
- $67.0B
- Net income, trailing twelve months
- $133.7B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 30%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Customers and suppliers
Who buys from MSFT and who it buys from, as the companies report it.
- NSITInsight Enterprises, Inc.32%
MSFT is 32% of its purchases · FY2025 10-K
- CNXNPC Connection, Inc.13%
MSFT is 13% of its purchases · FY2025 10-K
- AAOIApplied Optoelectronics, Inc.29%
MSFT is 29% of its revenue · FY2025 10-K
A company has to disclose every customer behind 10% or more of its revenue. Each share comes from the latest annual report of the company that states it and shows on both companies’ pages; MSFT’s own figures are from its FY2026 10-K. Smaller customers and suppliers go unreported.
Software, Infrastructure
Ranks #9 of 78 by RyuScore