Microsoft Corporation (MSFT)

Days of inventory on hand (DOH)

		Dec 31, 2024	Sep 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019
Inventory turnover		132.02	68.63	82.95	64.50	34.00	40.33	34.74	33.21	22.49	24.94	27.33	28.71	24.38	30.33	34.78	39.32	27.26	38.61	42.70	37.79
DOH	days	2.76	5.32	4.40	5.66	10.73	9.05	10.51	10.99	16.23	14.63	13.35	12.71	14.97	12.04	10.49	9.28	13.39	9.45	8.55	9.66

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 132.02
= 2.76

DOH (Days of Inventory on Hand) measures the average number of days a company holds its inventory before selling it. A lower DOH is generally favorable as it indicates efficient inventory management.

Analyzing Microsoft Corporation's DOH data from December 2019 to December 2024, we observe fluctuations in this ratio over time. The trend shows a relatively stable DOH between 8 and 10 days from December 2019 to December 2021.

However, from March 2022 onwards, there is a noticeable increase in DOH, reaching a peak of 16.23 days by September 2022. This suggests a potential buildup of inventory or slower sales relative to production capacity during that period.

Subsequently, there is a decline in DOH, hitting a low of 2.76 days by December 2024. This significant decrease may indicate improvements in inventory turnover efficiency, possibly through effective inventory management practices or increased demand for Microsoft's products.

Overall, while fluctuations in DOH are normal for businesses, it is essential for Microsoft Corporation to closely monitor and manage its inventory levels to balance between having enough inventory to meet demand and avoiding excess inventory holding costs.