Microsoft Corporation (MSFT)
Quick ratio
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 17,482,000 | 20,840,000 | 18,315,000 | 19,634,000 | 17,305,000 | 80,452,000 | 34,704,000 | 26,562,000 | 15,646,000 | 22,884,000 | 13,931,000 | 12,498,000 | 20,604,000 | 19,165,000 | 14,224,000 | 13,702,000 | 14,432,000 | 17,205,000 | 13,576,000 | 11,710,000 |
| Short-term investments | US$ in thousands | 54,069,000 | 57,589,000 | 57,216,000 | 60,379,000 | 63,677,000 | 63,499,000 | 76,552,000 | 77,865,000 | 83,862,000 | 84,378,000 | 90,818,000 | 92,195,000 | 104,765,000 | 111,419,000 | 116,032,000 | 111,705,000 | 117,536,000 | 120,772,000 | 122,951,000 | 125,916,000 |
| Receivables | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| 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 |
| Quick ratio | 0.66 | 0.68 | 0.60 | 0.68 | 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 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($17,482,000K
+ $54,069,000K
+ $—K)
÷ $108,882,000K
= 0.66
Based on the provided data, Microsoft Corporation's quick ratio has shown some fluctuations over the years. The quick ratio measures the company's ability to meet its short-term obligations with its most liquid assets, excluding inventory. A higher quick ratio is generally considered favorable as it indicates a stronger ability to cover short-term liabilities.
From December 31, 2019, to June 30, 2021, Microsoft's quick ratio displayed a generally positive trend, starting at 2.65 and reaching a peak of 2.73. This implies the company had a robust liquidity position during this period. However, starting from March 31, 2021, the quick ratio began to decline steadily, dropping to 1.54 by June 30, 2023. This downward trend suggests a potential weakening in Microsoft's ability to cover immediate obligations with its liquid assets.
Despite the decline, the quick ratio remained above 1 throughout the period, indicating that Microsoft still had sufficient liquid assets to meet short-term liabilities. However, the decreasing trend from March 31, 2021, onwards raises some concerns about the company's liquidity position and ability to maintain its current ratio of above 1 in the future.
Overall, continuous monitoring and analysis of Microsoft's quick ratio, along with other liquidity metrics, would be advisable to assess the company's short-term financial strength and ability to meet its obligations as they come due.
Peer comparison
Dec 31, 2024