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Forensic Analysis · Software & SaaS · as of Nov 8, 2026

Microsoft Corp (MSFT)

A forensic read on Microsoft Corp built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.

C · Mixed — selective
Forensic grade
Safe
Financial health
4.6
Distress distance
Clean
Earnings quality
1
Forensic signals
34.0%
ROE
17.8%
Revenue growth

This free snapshot doesn't read filing or proxy text, so the auditor-quality and governance checks that can lower a grade were not evaluated (auditor quality, say on pay, board independence, going concern). Those checks only ever lower a grade, so the full analysis can land below the grade above but never above it — treat it as the most favourable reading, not the settled one.

Microsoft Corp earns a C (Mixed — selective) forensic quality grade, and its balance-sheet distress test reads 4.6, placing it in the Safe zone. 1 forensic signal was flagged in its latest SEC filings, led by accruals ratio (% of NOA).

What the filings flag

+25.8%
FY2025→FY2026
Accruals ratio (% of NOA). Net operating assets grew +25.8% relative to their own average in FY2026 — scaled by NOA itself, not by total assets, which is what the Forensic Screens card's own accrual row divides by. Accruals are building sharply — a large slice of profit sits in operating assets, not cash. An accrual is a claim that still has to be collected or written down, so the gap resolves in a later period whichever way it goes. The build is led by PP&E up +53% against revenue +18% and inventory up +49% against +21% in cost of sales. A cash-flow measure on the same base disagrees: reported earnings ran behind operating cash by 12% of net operating assets, against an accruals ratio of 25.8%. The two are computed differently: the accruals ratio is the change in net operating assets over average net operating assets, while the cash-flow figure is net income less operating cash flow over that same average. Read them as two results, not one.Accruals ratio: the year-over-year change in net operating assets, relative to their own average.NOA (net operating assets): the money tied up in running the business, operating assets minus operating liabilities.

Key fundamentals

Latest Revenue$331.84B
Revenue Growth YoY+17.8%
Revenue CAGR (2yr)+16.4%
Net Margin40.3%
Free Cash Flow$66.99B
Return on Equity34.0%
Debt / Equity0.09x

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Data from SEC EDGAR public filings · metrics as of Nov 8, 2026. Forensic signals flag probability, not certainty.

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