Microsoft Corporation (MSFT)

Inventory turnover

Dec 31, 2024 Sep 30, 2024 Jun 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
Cost of revenue (ttm) US$ in thousands 80,087,000 77,911,000 74,114,000 71,225,000 68,848,000 66,713,000 65,863,000 65,497,000 64,984,000 64,456,000 62,650,000 60,212,000 57,642,000 54,876,000 52,232,000 50,580,000 48,510,000 46,674,000 46,078,000 44,151,000
Inventory US$ in thousands 909,000 1,626,000 1,246,000 1,304,000 1,615,000 3,000,000 2,500,000 2,877,000 2,980,000 4,268,000 3,742,000 3,296,000 3,019,000 3,411,000 2,636,000 2,245,000 1,924,000 2,705,000 1,895,000 1,644,000
Inventory turnover 88.10 47.92 59.48 54.62 42.63 22.24 26.35 22.77 21.81 15.10 16.74 18.27 19.09 16.09 19.81 22.53 25.21 17.25 24.32 26.86

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $80,087,000K ÷ $909,000K
= 88.10

Inventory turnover ratio is a key metric that measures how efficiently a company manages its inventory by assessing how many times the company sells and replaces its average inventory over a specific period. For Microsoft Corporation, the inventory turnover ratio has shown some fluctuations over the analyzed period.

The inventory turnover for Microsoft started at 37.79 at the end of December 2019 and showed an increasing trend, reaching a peak of 82.95 by the end of March 2024. This upward trend indicates that Microsoft was selling and replacing its inventory at a faster pace during this period.

However, after the peak in March 2024, there was a significant drop in inventory turnover to 68.63 by the end of September 2024, followed by a steep increase to 132.02 by the end of December 2024. Such fluctuations may be attributed to various factors such as changes in demand, production issues, or strategic inventory management decisions.

Investors and analysts closely monitor inventory turnover ratios to assess a company's operational efficiency and inventory management practices. A high inventory turnover ratio generally indicates effective inventory management, while a low ratio may suggest overstocking, obsolete inventory, or slowing sales.

It is essential for Microsoft to continue monitoring and optimizing its inventory turnover to ensure efficient utilization of resources and maintain a healthy balance between inventory levels and sales volumes.


See also:

Microsoft Corporation Inventory Turnover (Quarterly Data)