Microsoft Corporation (MSFT)

Activity ratios

Short-term

Turnover ratios

	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
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
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
Payables turnover	4.90	5.98	5.89	5.28	5.57	6.53	6.44	5.78	4.91	5.60	5.66	5.61	5.27	5.82	5.92	5.89	5.84	7.59	7.82	8.00
Working capital turnover	7.01	8.15	8.53	2.61	2.62	2.63	2.65	2.74	2.63	2.49	1.89	1.85	1.73	1.70	1.42	1.36	1.29	1.22	1.23	1.19

The inventory turnover ratio for Microsoft Corporation has shown fluctuating values over the recent quarters, with a general increasing trend over the past five quarters. This indicates that the company is selling its inventory more efficiently and quickly. However, the ratio remains at a high level, suggesting that Microsoft is managing its inventory effectively.

In terms of receivables turnover, the ratio has also been volatile, with some quarters showing higher values than others. This indicates that Microsoft is collecting its accounts receivables at varying speeds. Overall, the company's ability to collect funds from customers seems to be satisfactory.

The payables turnover ratio for Microsoft has been relatively stable over the quarters, indicating a consistent pattern in managing its accounts payable. The company is paying its creditors at a relatively steady rate, which can be seen as a positive sign of financial stability and effective cash flow management.

The working capital turnover ratio has been increasing gradually over the recent quarters, reflecting an improvement in utilizing its working capital efficiently to generate sales. This suggests that Microsoft is effectively managing its working capital to support its operations and generate revenue.

Overall, based on the activity ratios analyzed, Microsoft Corporation appears to be effectively managing its inventory, receivables, payables, and working capital to support its business operations and maintain a healthy financial position.

Average number of days

		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
Days of inventory on hand (DOH)	days	5.32	4.40	5.66	10.73	9.05	10.51	10.99	16.23	14.63	13.35	12.71	14.97	12.04	10.49	9.28	13.39	9.45	8.55	9.66	13.95
Days of sales outstanding (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
Number of days of payables	days	74.47	61.03	62.00	69.08	65.51	55.89	56.63	63.15	74.30	65.17	64.49	65.11	69.23	62.70	61.61	61.92	62.51	48.08	46.68	45.63

Based on the activity ratios provided for Microsoft Corporation over the past few quarters, we can observe the following trends:

1. Days of Inventory on Hand (DOH):
- The days of inventory on hand have fluctuated but show a decreasing trend overall. This suggests that Microsoft has been managing its inventory efficiently, with lower levels of inventory on hand in recent quarters compared to previous periods.
- A decrease in DOH indicates that the company is selling its inventory faster or carrying less inventory, which can improve cash flow and reduce storage costs.

2. Days of Sales Outstanding (DSO):
- The days of sales outstanding have also varied, with some quarters showing higher DSO and others lower. However, there is no clear trend in DSO over the analyzed period.
- A high DSO indicates that Microsoft is taking longer to collect payments from customers, which can potentially impact cash flow and liquidity.

3. Number of Days of Payables:
- The number of days of payables has fluctuated over the period, but there is a general trend of stability. Microsoft appears to be managing its payables effectively without significant changes in payment terms.
- A longer number of days of payables could suggest that the company is taking longer to pay its suppliers, which may positively impact cash flow but could strain supplier relations if not managed carefully.

Overall, Microsoft's activity ratios indicate efficient management of inventory levels and payables, but there may be room for improvement in collecting payments from customers in a timely manner. Monitoring and potentially reducing the days of sales outstanding could help improve cash flows and overall liquidity for the company.

Long-term

	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
Fixed asset turnover	1.59	1.92	2.00	2.11	2.19	2.33	2.44	2.61	2.64	2.71	2.72	2.73	2.78	2.88	2.93	3.03	3.20	3.32	3.27	3.33
Total asset turnover	0.47	0.48	0.48	0.48	0.51	0.54	0.55	0.56	0.54	0.55	0.54	0.52	0.50	0.51	0.50	0.48	0.47	0.48	0.47	0.46

The fixed asset turnover ratio for Microsoft Corporation has shown a declining trend over the last few quarters, indicating that the efficiency of utilizing fixed assets to generate sales has decreased. However, the ratio remains relatively stable around the range of 2.00 to 2.70, which suggests that the company is still able to generate a reasonable level of revenue from its fixed assets.

On the other hand, the total asset turnover ratio has been relatively stable, hovering around 0.50 to 0.55, indicating that Microsoft is utilizing its total assets effectively to generate sales. This stable trend suggests that the company's overall asset management efficiency has been consistent over the quarters.

In comparison to the industry average, Microsoft's fixed asset turnover is on the lower side, which may indicate that the company could improve its utilization of fixed assets to generate more revenue. However, the total asset turnover ratio is in line with industry norms, suggesting that Microsoft is managing its total assets efficiently to drive sales.

Overall, while there is room for improvement in the fixed asset turnover ratio, Microsoft's stable total asset turnover ratio reflects effective asset management and revenue generation capability.