Microsoft Corporation (MSFT)

Receivables turnover

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Revenue	US$ in thousands	281,724,000	245,122,000	211,915,000	198,270,000	168,088,000
Receivables	US$ in thousands	69,905,000	56,924,000	48,688,000	44,261,000	38,043,000
Receivables turnover		4.03	4.31	4.35	4.48	4.42

June 30, 2025 calculation

Receivables turnover = Revenue ÷ Receivables
= $281,724,000K ÷ $69,905,000K
= 4.03

The receivables turnover ratio for Microsoft Corporation over the period from June 30, 2021, to June 30, 2025, demonstrates a relatively stable yet slightly declining trend. In the fiscal year ending June 30, 2021, the ratio stood at 4.42, indicating that the company collected its average receivables approximately 4.42 times during that year. This ratio experienced a marginal increase to 4.48 in the subsequent year ending June 30, 2022, suggesting a slightly improved efficiency in collection efforts.

However, starting from June 30, 2023, the ratio continued to decline gradually, reaching 4.35, then further decreasing to 4.31 by June 30, 2024, and ultimately falling to 4.03 in the fiscal year ending June 30, 2025. The overall downward trend reflects a gradual slowdown in the receivables turnover, which may imply that the company is taking marginally longer to collect its outstanding receivables over the period.

This decreasing pattern, while modest, could be indicative of shifts in credit policies, changes in customer payment behaviors, or variations in the company's sales credit terms. Nonetheless, the ratio remains above 4 in all observed periods, suggesting that receivables are generally collected within a period of approximately 82 to 118 days (calculated as 365 divided by the receivables turnover), with the collection period slightly extending over the years.

In summary, while Microsoft’s receivables turnover has shown slight fluctuations, the overall trend points to a modest decline in collection efficiency over the analyzed period, which warrants ongoing monitoring to assess potential implications for working capital management.