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When I analyse Coca-Cola, in the balanced sheet, they have a row called Treasury Stock. I think it means that the Company buyback their own stock. However, when I analyse Microsoft, they have not Treasury stock. Am I wrong to say that Microsoft do not buyback it own stock. It is curious for me because it seems both companies have a durable competitive advantage. If Microsoft isn't buying back its own stock, how do you know what they're doing with their excess cash? I have calculated that KO has an adjusted Debt-to-Equity ratio near 0.9 which is good, but Microsoft has near 2 as adjusted Debt-to-Equity ratio. It means that for each dollar of capital, they have 2$ for debt. It is weird. Where am I wrong?

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  • Please provide links to the data you used for your calculations, and provide the steps you used in your calculations.
    – Flux
    Commented Aug 24, 2022 at 3:39
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    According to this: finance.yahoo.com/quote/MSFT/balance-sheet?p=MSFT They have total debt of $61B and shareholders equity of $166B for a ratio of 0.37. Also, 'capital' comprises much more than just equity.
    – chili555
    Commented Aug 24, 2022 at 13:14

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Microsoft is doing share repurchases- you can see the totals in their cash flow statement. However, instead of reporting "treasury shares" as a separate line in their balance sheet, they just report Total net common stock, which included both repurchases and shares issued as compensation. Since they are issuing more share comp than repurchasing, their total common equity is increasing.

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  • Can you explain to me how I could compute their ADJUSTED debt-to-equity ratio not knowing the exact number of shares they repurchased?
    – J.Doe
    Commented Sep 1, 2022 at 2:25
  • You don't need to know the number of shares - you need to know the total value of those shares. If there's no Treasury Stock on the balance sheet, you can get the amount for the current period(s) from the cash flow statement, and may need to look at previous cash flow statements to get a running total. You can add that amount to total equity to get the adjusted D/E ratio.
    – D Stanley
    Commented Sep 1, 2022 at 14:15
  • Yes, it seems reasonable to add up the ''repurchase shares'' from the cashflow statement. How far in the past do I need to go to start adding up those ''repurchase shares''?
    – J.Doe
    Commented Sep 1, 2022 at 16:14
  • Theoretically you'd have to back throughout the entire history, but I suspect that you could just look at the recent repurchases. If the total repurchases before that were material I'd suspect that they'd be reported.
    – D Stanley
    Commented Sep 1, 2022 at 18:35
  • Is there a way to extrapolate their Treasure Stock or their adjusted D/E ratio? I can't go that far and it takes a lot of time
    – J.Doe
    Commented Sep 1, 2022 at 21:13

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