Microsoft Corporation (MSFT)

Inventory turnover

		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
Cost of revenue (ttm)	US$ in thousands	111,595,000	108,164,000	104,168,000	102,007,000	100,826,000	99,955,000	98,955,000	95,995,000	93,342,000	90,084,000	86,673,000	83,147,000	79,943,000	78,079,000	75,659,000	73,738,000	73,160,000	70,198,000	68,893,000	68,580,000
Inventory	US$ in thousands	1,626,000	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	1,823,000	2,622,000
Inventory turnover		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	26.16

September 30, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $111,595,000K ÷ $1,626,000K
= 68.63

The inventory turnover ratio of Microsoft Corporation has shown fluctuations over the past few quarters. The ratio indicates how effectively the company is managing its inventory levels. A higher inventory turnover ratio suggests that goods are selling quickly, while a lower ratio may indicate slow-moving inventory or overstocking.

Analyzing the trend, we observe that the inventory turnover ratio has generally been increasing since the end of 2019, indicating that Microsoft has been managing its inventory more efficiently. The ratio peaked at 82.95 in March 2024, which suggests that inventory was turning over rapidly at that point.

However, the ratio saw a slight dip in the following quarter but still remained relatively high compared to previous periods. The significant improvement in inventory turnover since the end of 2019 reflects the company's effective inventory management practices.

Overall, the increasing trend in inventory turnover for Microsoft Corporation signals efficient inventory management and potentially better cash flow management through reduced inventory holding costs. This trend is generally positive for the company as it indicates effective inventory utilization and potential operational efficiency improvements.