Microsoft Corporation (MSFT)
Payables turnover
| Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 100,049,000 | 93,355,000 | 79,977,000 | 73,159,000 | 67,908,000 |
| Payables | US$ in thousands | 18,095,000 | 19,000,000 | 15,163,000 | 12,530,000 | 9,382,000 |
| Payables turnover | 5.53 | 4.91 | 5.27 | 5.84 | 7.24 |
June 30, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $100,049,000K ÷ $18,095,000K
= 5.53
The payables turnover ratio for Microsoft Corporation has fluctuated over the past five years. The ratio indicates the company's ability to efficiently manage its trade credit obligations with suppliers.
In the most recent period, ending June 30, 2023, the payables turnover ratio stands at 3.64, reflecting a slight improvement from the previous year. This suggests that Microsoft is taking approximately 3.64 times to pay off its suppliers, indicating a relatively efficient management of trade payables.
However, a comparison of the latest ratio with the ratios of the preceding years reveals a declining trend, as the ratio was higher in 2019 at 4.57 and has since been declining. This could indicate a lengthening of the payment period to suppliers over the years, which may raise concerns about the company's relationship with its suppliers and its working capital management.
Overall, while the recent improvement in the payables turnover ratio is positive, Microsoft Corporation may need to continue monitoring its ability to manage supplier credit efficiently in the face of the declining trend observed over the past five years.
Peer comparison
Jun 30, 2023