Microsoft Corporation (MSFT)

Working capital turnover

		Jun 30, 2025	Mar 31, 2025	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
Revenue (ttm)	US$ in thousands	281,724,000	270,010,000	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
Total current assets	US$ in thousands	191,131,000	156,644,000	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
Total current liabilities	US$ in thousands	141,218,000	114,206,000	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
Working capital turnover		5.64	6.36	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

June 30, 2025 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $281,724,000K ÷ ($191,131,000K – $141,218,000K)
= 5.64

The analysis of Microsoft Corporation’s working capital turnover ratio over the specified period reveals several notable trends. From September 30, 2020, through September 30, 2023, the ratio exhibits a consistent upward trajectory, increasing from 1.37 to a peak of 2.77. This incremental rise indicates that the company's efficiency in utilizing its working capital to generate sales improved steadily during this period, reflecting potentially enhanced operational efficiency and better management of short-term assets and liabilities.

However, a dramatic shift occurs beginning at the end of 2023. The working capital turnover ratio experiences a substantial leap from approximately 2.65–2.68 in the first quarter of 2023 to an exceptional level of 8.63 by December 31, 2023. This sharp increase suggests a significant change in financial dynamics, possibly due to an abrupt reduction in working capital or an increase in sales relative to working capital assets, or a combination of both. Such an unusual spike warrants careful examination, as it may indicate extraordinary financial or operational events.

Following this peak, the ratio demonstrates a decreasing trend throughout 2024 and into mid-2025, declining from 8.26 in the first quarter of 2024 to 5.64 by June 30, 2025. This decline could imply a stabilization or normalization after the prior spike, or a change in the company's operational strategies affecting short-term asset and liability management.

Overall, the trend indicates increasing efficiency from late 2020 through late 2023, culminating in a remarkable peak at the end of 2023, followed by a progressive reduction in subsequent quarters. These fluctuations suggest periods of significant operational adjustments or financial restructuring, with the ratio serving as a key indicator of how effectively Microsoft is leveraging its working capital to support sales activities over time.