Microsoft Corporation (MSFT)

Payables turnover

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Cost of revenue	US$ in thousands	87,831,000	74,114,000	65,863,000	62,650,000	52,232,000
Payables	US$ in thousands	27,724,000	21,996,000	18,095,000	19,000,000	15,163,000
Payables turnover		3.17	3.37	3.64	3.30	3.44

June 30, 2025 calculation

Payables turnover = Cost of revenue ÷ Payables
= $87,831,000K ÷ $27,724,000K
= 3.17

The payables turnover ratio for Microsoft Corporation over the specified periods demonstrates fluctuating liquidity management with regard to accounts payable. The ratio was 3.44 times as of June 30, 2021, indicating that the company paid off its average accounts payable approximately 3.44 times within the fiscal year. This ratio slightly decreased to 3.30 times by June 30, 2022, suggesting a marginal extension in the payment period or a more prolonged relationship with suppliers during that period.

In the subsequent year ending June 30, 2023, the ratio increased to 3.64, reflecting a somewhat quicker turnover in settling payables, likely pointing to more efficient or timely payments. However, this upward trend was not sustained, as the ratio declined to 3.37 during the year ending June 30, 2024, indicating a slight loosening in the payment cycle. The lowest ratio in the dataset, 3.17, was observed for the year ending June 30, 2025, signifying the slowest pace of paying off accounts payable in this time frame.

Overall, the data depicts a pattern of moderate variability in the payables turnover ratio, with the overall trend suggesting periods of both acceleration and deceleration in paying suppliers. These fluctuations could be attributed to changes in procurement strategies, cash flow management, or strategic supplier negotiations, but they also reflect the company's consistent utilization of its trade credit terms over time.