Microsoft Corporation (MSFT)

Liquidity ratios

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
Current ratio 1.22 1.66 1.77 1.91 1.93 1.84 1.78 1.99 2.25 2.16 2.08 2.29 2.58 2.53 2.52 2.90 2.80 2.85 2.53 2.97
Quick ratio 1.02 1.45 1.54 1.66 1.66 1.59 1.58 1.79 2.06 1.97 1.91 2.11 2.37 2.31 2.33 2.73 2.65 2.68 2.35 2.80
Cash ratio 0.67 1.15 1.07 1.22 1.22 1.23 1.10 1.35 1.62 1.62 1.47 1.74 1.96 1.97 1.89 2.34 2.25 2.35 1.93 2.44

Based on the data provided, Microsoft Corporation's liquidity ratios have shown fluctuations over the past few quarters. The current ratio, a measure of the company's ability to meet short-term obligations with its current assets, declined from 1.99 in March 2022 to 1.22 in December 2023. Similarly, the quick ratio, which excludes inventory from current assets, followed a similar trend, declining from 1.95 in March 2022 to 1.20 in December 2023.

On the other hand, the cash ratio, which specifically assesses the company's ability to cover short-term liabilities with its cash and cash equivalents, also exhibited a decline from 1.52 in March 2022 to 0.85 in December 2023.

These downward trends in liquidity ratios may indicate a potential decrease in Microsoft's ability to meet its short-term obligations using its current assets and cash reserves. It would be important to closely monitor the company's liquidity position and assess the impact of these fluctuations on its overall financial health.

See also:

Microsoft Corporation Liquidity Ratios (Quarterly Data)

Additional liquidity measure

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
Cash conversion cycle days 13.16 4.06 28.28 22.36 20.15 11.21 24.58 12.65 17.19 9.04 28.61 10.32 15.12 11.60 29.75 21.04 27.80 22.78 47.49 34.32

The cash conversion cycle (CCC) measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A negative CCC typically indicates efficient management of working capital and a quicker turnover of assets.

Based on the data provided, Microsoft Corporation has consistently maintained a negative CCC over the past eight quarters, with fluctuating values.

In Q4 2023, the CCC stood at -16.56 days, indicating an improvement from the previous quarter. This suggests that Microsoft was able to convert its investments in inventory and other resources into cash at a faster rate than in the previous quarter.

Similarly, in Q3 2023, the CCC further decreased to -27.44 days, reflecting even more efficient management of working capital and a significant improvement from the previous quarter.

In Q2 2023, the CCC was -2.56 days, indicating a substantial change from the previous quarter. The company managed to convert its investments into cash at a faster rate, resulting in a shorter CCC.

In Q1 2023, the CCC was -3.46 days, indicating a slight increase from the previous quarter but still reflecting efficient working capital management.

Overall, the negative CCC values over the past eight quarters suggest that Microsoft has effectively managed its working capital, minimized the time between spending on production and receiving cash from sales, and streamlined its cash conversion process. This trend indicates efficient operational and financial management within the company.