Microsoft Corporation (MSFT)

Quick ratio

		Dec 31, 2024	Sep 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	Dec 31, 2019
Cash	US$ in thousands	17,482,000	20,840,000	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	8,864,000
Short-term investments	US$ in thousands	54,073,000	57,588,000	60,387,000	63,712,000	63,499,000	76,558,000	77,865,000	83,862,000	84,378,000	90,826,000	92,195,000	104,765,000	111,450,000	116,110,000	111,705,000	117,536,000	120,772,000	122,951,000	125,916,000	125,389,000
Receivables	US$ in thousands	48,188,000	44,148,000	44,029,000	42,831,000	36,953,000	48,688,000	38,137,000	36,378,000	32,015,000	45,261,000	33,613,000	34,507,000	28,203,000	39,008,000	27,129,000	28,020,000	23,951,000	32,011,000	22,699,000	23,525,000
Total current liabilities	US$ in thousands	108,882,000	115,200,000	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	59,640,000
Quick ratio		1.10	1.06	1.05	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

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($17,482,000K + $54,073,000K + $48,188,000K) ÷ $108,882,000K
= 1.10

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.