The average business in the United States earns a return on equity of 14.5% right now (historically, American businesses have earned return on equity around 12.0%). In 2000, Microsoft was earning return on (unleveraged) equity of 36.0%. By coincidence, in 2019, Microsoft is also earning return on (unleveraged) equity of 36.3%.
Over the past nineteen years, Microsoft has managed to grow profits from $8 billion to $36.5 billion annually. While some of this is attributable to new products and greater penetration across various global markets, the greater percentage of Microsoft’s growth can be attributed to the greater velocity of Microsoft purchases that occur. In 1999, the average Microsoft consumer made a Microsoft purchase … Read the rest of this article!