Microsoft Corporation (MSFT)

Working capital turnover

		Dec 31, 2024	Sep 30, 2024	Jun 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
Revenue (ttm)	US$ in thousands	261,802,000	254,190,000	245,122,000	236,584,000	227,583,000	218,310,000	211,915,000	207,591,000	204,094,000	203,075,000	198,270,000	192,557,000	184,903,000	176,251,000	168,088,000	159,969,000	153,284,000	147,114,000	143,015,000	138,699,000
Total current assets	US$ in thousands	147,080,000	149,926,000	159,734,000	147,180,000	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
Total current liabilities	US$ in thousands	108,882,000	115,200,000	125,286,000	118,525,000	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
Working capital turnover		6.85	7.32	7.12	8.26	8.63	2.64	2.65	2.65	2.68	2.77	2.66	2.52	1.91	1.88	1.76	1.71	1.44	1.37	1.30	1.24

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $261,802,000K ÷ ($147,080,000K – $108,882,000K)
= 6.85

The working capital turnover ratio for Microsoft Corporation has shown a consistent increasing trend from December 2019 to December 2023, indicating improved efficiency in managing its working capital. The ratio increased from 1.23 in December 2019 to 8.53 in December 2023, showcasing a significant improvement in the company's ability to generate revenue from its working capital.

However, there was a slight decline in the ratio in the subsequent periods, with the ratio decreasing to 6.72 in December 2024. While this decrease may raise some concerns, it is essential to note that Microsoft's working capital turnover remains at a relatively high level compared to the initial periods, suggesting continued efficiency in utilizing its working capital.

Overall, the trend in Microsoft's working capital turnover ratio reflects the company's strong performance in efficiently managing its working capital to support its operations and generate revenue. It is essential for investors and analysts to monitor this ratio over time to assess the company's liquidity and operational efficiency.