Microsoft Corporation (MSFT)

Quick ratio

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Cash	US$ in thousands	30,242,000	18,315,000	34,704,000	13,931,000	14,224,000
Short-term investments	US$ in thousands	64,323,000	57,216,000	76,558,000	90,826,000	116,110,000
Receivables	US$ in thousands	69,905,000	56,924,000	48,688,000	44,261,000	38,043,000
Total current liabilities	US$ in thousands	141,218,000	125,286,000	104,149,000	95,082,000	88,657,000
Quick ratio		1.16	1.06	1.54	1.57	1.90

June 30, 2025 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($30,242,000K + $64,323,000K + $69,905,000K) ÷ $141,218,000K
= 1.16

The quick ratio of Microsoft Corporation over the analyzed period indicates a general trend of declining liquidity relative to its short-term obligations. As of June 30, 2021, the quick ratio stood at 1.90, suggesting that the company maintained a strong liquidity position, with enough liquid assets to cover its current liabilities nearly twice over. By June 30, 2022, the ratio declined to 1.57, reflecting a decrease in liquid asset coverage but still remaining comfortably above the critical threshold of 1.0. This downward trend continued into June 30, 2023, with the ratio decreasing marginally to 1.54, indicating relative stability with a slight decline in liquidity cushion.

The further decline in the quick ratio to 1.06 by June 30, 2024, represents a notable reduction in the company's liquid asset coverage, approaching a more cautious liquidity positioning. Although still above the threshold of 1.0, this suggests that Microsoft’s quick assets now closely match its current liabilities, leaving less buffer against short-term financial pressures. The ratio saw a modest recovery to 1.16 by June 30, 2025, indicating some improvement in liquidity position, but still reflecting a tighter margin relative to earlier years.

Overall, the trend in Microsoft’s quick ratio indicates a gradual decline in short-term liquidity, which may be attributable to increased investment in assets, shifts in cash management strategies, or changes in current liabilities. Despite this downward trajectory, the ratios remaining above 1.0 historically imply that the company has maintained sufficient liquid assets to meet immediate obligations, though the diminishing margins warrant ongoing monitoring to ensure liquidity remains adequate amid potential operational or market changes.