Microsoft Corporation (MSFT)

Quick ratio

		Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019
Cash	US$ in thousands	34,704,000	13,931,000	14,224,000	13,576,000	11,356,000
Short-term investments	US$ in thousands	76,558,000	90,826,000	116,110,000	122,951,000	122,463,000
Receivables	US$ in thousands	48,688,000	45,261,000	39,008,000	32,011,000	29,524,000
Total current liabilities	US$ in thousands	104,149,000	95,082,000	88,657,000	72,310,000	69,420,000
Quick ratio		1.54	1.58	1.91	2.33	2.35

June 30, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($34,704,000K + $76,558,000K + $48,688,000K) ÷ $104,149,000K
= 1.54

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. It is calculated by dividing quick assets (cash, marketable securities, and accounts receivable) by current liabilities. A quick ratio of 1 or higher is generally considered healthy, indicating that the company has enough short-term assets to cover its short-term liabilities.

Looking at Microsoft Corporation's quick ratio over the past five years, we can see the following trend:
- Jun 30, 2023: 1.75
- Jun 30, 2022: 1.75
- Jun 30, 2021: 2.05
- Jun 30, 2020: 2.49
- Jun 30, 2019: 2.50

The quick ratio has remained relatively stable over the past three years, hovering around the 1.75 to 2.50 range. However, it is important to note that a quick ratio of 1.75 still indicates that Microsoft has sufficient quick assets to cover its current liabilities.

A ratio above 1 means Microsoft has more than enough liquid assets to meet short-term obligations, indicating a strong ability to handle its short-term financial commitments without having to sell inventory or obtain additional financing.

Overall, the quick ratio suggests that Microsoft has maintained a healthy level of liquidity and can meet its short-term obligations comfortably. However, further analysis in conjunction with other financial metrics would provide a more comprehensive assessment of the company's financial health.