Microsoft Corporation (MSFT)

Working capital turnover

		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	Jun 30, 2019	Mar 31, 2019
Revenue (ttm)	US$ in thousands	224,942,000	216,125,000	209,732,000	205,479,000	201,806,000	201,002,000	196,109,000	190,298,000	182,625,000	173,955,000	165,936,000	158,374,000	151,630,000	145,394,000	141,098,000	136,782,000	132,460,000	127,934,000	124,121,000	120,489,000
Total current assets	US$ in thousands	147,393,000	207,586,000	184,257,000	163,889,000	157,823,000	160,812,000	169,684,000	153,922,000	174,188,000	174,326,000	184,406,000	165,614,000	173,973,000	177,077,000	181,915,000	170,505,000	167,074,000	165,896,000	175,552,000	159,887,000
Total current liabilities	US$ in thousands	121,016,000	124,792,000	104,149,000	85,691,000	81,718,000	87,389,000	95,082,000	77,439,000	77,510,000	80,528,000	88,657,000	72,193,000	67,486,000	70,056,000	72,310,000	58,707,000	59,640,000	58,118,000	69,420,000	53,861,000
Working capital turnover		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	1.17	1.14

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $224,942,000K ÷ ($147,393,000K – $121,016,000K)
= 8.53

The working capital turnover ratio for Microsoft Corporation has exhibited significant fluctuations over the past eight quarters. The ratio measures how efficiently the company is using its working capital to generate revenue. A higher ratio indicates that the company is generating more sales revenue per dollar of working capital.

The working capital turnover ratio for Microsoft was 8.63 at the end of December 2023, reflecting a substantial increase from the previous quarter. This suggests that Microsoft improved its efficiency in utilizing its working capital to generate sales revenue during this period. However, it's important to note that a very high turnover ratio may also indicate aggressive revenue recognition and collection policies, as well as potential risks related to liquidity and credit management.

In the preceding quarter, the ratio was 2.64, which was significantly lower than the most recent figure. This substantial decrease indicates that Microsoft's efficiency in converting working capital into revenue had experienced a decline. It's essential to analyze the components of working capital, such as accounts receivable, accounts payable, and inventory, to identify the factors contributing to this change in efficiency.

Overall, the fluctuation in the working capital turnover ratio for Microsoft Corporation suggests that the company's management of working capital and its impact on generating sales revenue has varied over the past eight quarters. Further analysis of the company's working capital components and management practices would be necessary to gain a deeper understanding of these fluctuations.