Microsoft Corporation (MSFT)

Days of sales outstanding (DSO)

		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	Sep 30, 2019
Receivables turnover		5.51	5.30	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
DSO	days	66.24	68.84	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

September 30, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.51
= 66.24

Days Sales Outstanding (DSO) is a financial ratio that measures how long it takes for a company to collect its accounts receivable. A lower DSO indicates that the company is able to collect payments from its customers more quickly, which is generally favorable for cash flow management.

Analyzing Microsoft Corporation's DSO over the past 6 quarters, we can see fluctuations in the metric. In the most recent quarter, as of September 30, 2024, the DSO was 66.24 days, showing a slight improvement compared to the previous quarter. This suggests that Microsoft has been more efficient in collecting payments from its customers.

Looking back further, we observe that DSO has varied over time, reaching a high of 85.80 days in the first quarter of 2022 and a low of 54.46 days in the fourth quarter of 2019. These fluctuations could indicate changes in the company's credit policies, customer payment behavior, or overall economic conditions.

Overall, a trend of decreasing DSO over time would be positive, as it indicates improved accounts receivable management and quicker cash conversions. Conversely, a trend of increasing DSO could signify potential issues with collecting payments promptly. It is essential for investors and analysts to monitor DSO trends alongside other financial ratios to assess the company's liquidity and efficiency in managing working capital.