Microsoft Corporation (MSFT)

Days of sales outstanding (DSO)

		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	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Receivables turnover		5.25	5.85	4.31	5.39	5.55	6.28	4.33	5.66	5.29	6.17	4.25	5.84	5.41	6.07	4.41	6.03	5.63	6.70	4.20	6.25
DSO	days	69.50	62.41	84.73	67.74	65.80	58.14	84.24	64.47	68.97	59.18	85.80	62.52	67.45	60.13	82.81	60.57	64.82	54.46	86.82	58.37

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.25
= 69.50

Days Sales Outstanding (DSO) is a measure used to evaluate how efficiently a company is able to collect its accounts receivable. It indicates the average number of days it takes for a company to collect payment after making a sale. A lower DSO suggests that a company is collecting payments more quickly, improving its cash flow and reducing the risk of bad debts.

Analyzing Microsoft Corporation's DSO over the past eight quarters reveals fluctuations in the efficiency of its accounts receivable management. In the latest quarter, ending December 31, 2023, the DSO increased to 68.69 days from 61.78 days in the previous quarter. This indicates a slowdown in collection as it took longer for the company to convert its sales into cash. The DSO reached its lowest level of 56.22 days in the quarter ending September 30, 2022, indicating a more efficient collections process, which improved cash flow and reduced credit risk.

The variation in DSO could be attributed to factors such as changes in credit policies, sales volume, customer payment behavior, or the effectiveness of the company's accounts receivable management. It is essential for investors and analysts to monitor these fluctuations to assess the impact on Microsoft's cash flow and financial health.