x

Microsoft: Net Worth, Beginnings, Shareholders, and More

by / ⠀Finance / July 21, 2022
microsoft building net worth

Microsoft is one of the largest companies in the world and it is a household name. But, do you know its history? Here we’ll tell you about Microsoft company’s net worth, beginnings, shareholders, and more.

Microsoft is the result of brainstorming between Bill Gates and Paul Allen. Both had wanted to create software that would run on the Altair 8800, the prototype personal computer. Though, Microsoft itself began in 1975 in a garage in Albuquerque.

Humble Beginnings

Just five years later, Microsoft made a deal to provide operating systems for IBM computers. Another five years later, Windows was released, changing the computer world for the better and is still an important part of its field. By the late 1980s, Microsoft had already become the world’s largest personal computer software company. Today, it competes every day with its rival Apple for the best computer tech company in the world.

Microsoft is currently headquartered in Redmond, Washington. Currently, the CEO is not Bill Gates, instead, it is Satya Nadella, who became the CEO in 2014. Before that, he was part of Microsoft’s cloud and enterprise group where he was the executive vice president. He also was responsible for creating and running Microsoft’s computing platform.

In the decades since its creation, Microsoft has made many millions of dollars. It wasn’t until April 25, 2019, that Microsoft made history when it was valued at a whopping $1 trillion. Later that year in October, its value increased to $1.04 trillion. Currently, Microsoft is now worth around $2 trillion dollars.

Market Cap

To understand the worth of the company, market capitalization is used. Market capitalization is the number of any sort of outstanding stock shares a company has issued out times the current market price for the stock. However, market capitalization does have its cons, especially as an evaluation method. For one, the market cap changes quite frequently. It is also very closely tied to a company’s current share price. But, it does not take in any direct financial factors of the company such as book value or growth rate.

Another value method is the price/earnings ratio, it is also related to the company’s share price. The P/E ratio relies heavily on a company’s earnings. But, sometimes, investors will feel that it is a more important factor in a company’s value. Microsoft’s P/E ratio is at 32.36.

So, using the market capitalization method, Microsoft, as of February 2022, is the second most valuable company in the world with its market cap at $2 trillion. So, as of Feb. 8th, an investor can buy into the company for $305 per share. The market cap varies on its share price and so as of Feb. 8th, Microsoft’s market cap is about $2.785 trillion.

Microsoft: Net Worth

Now, the net worth is the company’s assets minus any liabilities. This can also be referred to as shareholders’ equity. On June 30th, 2021, it was $141.988 billion. So, using company data, Microsoft’s net worth is based on measurable factors like assets and revenue. It is a more cautious estimate than most as it takes in full-year profits and revenue from the last three years. By this metric, Microsoft’s net worth is currently around $456,132,333,333, or just $456 billion in easier terms.

Here’s how the worth is factored out:

  • Share Price, 1 Year: $349.67-$224.26
  • Fiscal Year 2021 Revenue: $168,088,000,000
  • Shareholder’s Equity: $141,988,000,000
  • Total: $456,132,333,333

Microsoft’s revenue is separated into three categories:

  • Productivity and Business Processes: $15.97 billion, an increase of 19%
  • Intelligent Cloud: $18.3 billion, an increase of 26%
  • More Personal Computing, $17.5 billion, an increase of 15%
  • Total: $51.71 billion, an increase of 20% compared to the same quarter last year.

The Shareholders

Many shareholders for Microsoft exist. In total, they own an incredible $71.947% of all Microsoft shares. Here are the top 10 shareholders:

  1. The Vanguard Group, 8.19% of shares
  2. Blackrock Inc, 6.76% of shares
  3. State Street Corp., 3.93% of shares
  4. FMR LLC, 2.88% of shares
  5. T. Rowe Price Associates, 2.64% of shares
  6. Geode Capital Management, 1.68% of shares
  7. Capital World Investors, 1.47% of shares
  8. Capital Research Global Investors, 1.26% of shares
  9. Capital International Investors, 1.23% of shares
  10. Northern Trust Corporation, 1.20% of shares

Interestingly enough, if you are a part of a mutual fund or own one, then you may own a piece of Microsoft! Here are the top 10 mutual funds that have a percentage in Microsoft:

  1. Vanguard Total Stock Market Index, 2.83% of shares
  2. Vanguard 500 Index Fund, 2.11% of shares
  3. SPDR S&P 500 exchange-traded fund, 1.08% of shares
  4. Fidelity 500 Index Fund, 0.98% of shares
  5. Invesco ETF QQQ Trust, 0.90% of shares
  6. iShares Core S&P 500 ETF, 0.82% of shares
  7. Vanguard Growth Index Fund, 0.79% of shares
  8. Vanguard Institutional Index Fund, 0.77% of shares
  9. Growth Fund Of America Inc., 0.72% of shares
  10. Vanguard Information Technology Index Fund, 0.45% of shares

Conclusion

As for the future, it looks good for Microsoft. Certainly, they continue to exceed their estimates and demands remain strong for the company. On Yahoo Finance, Microsoft received a “buy” or “strong buy” rating from 27 out of 34 analysts. Likewise, the current average price is $370.97, which is up about 22% above its current price.

With all of this in mind, perhaps you can look into Microsoft as a potential investment! The company seems to only be going to new heights, so it seems like a safe bet.

About The Author

Tristan Anderson

Hello! My name is Tristan Anderson and I live in Manhattan, Kansas. I enjoy being in nature and animals. I am also a huge geek who loves Star Wars and has a growing collection.

x