Microsoft Corporation (MSFT)

Quick ratio

		Jun 30, 2025	Mar 31, 2025	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
Cash	US$ in thousands	30,242,000	28,828,000	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
Short-term investments	US$ in thousands	64,323,000	50,784,000	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
Receivables	US$ in thousands	69,905,000	51,700,000	48,188,000	44,148,000	56,924,000	44,029,000	42,831,000	36,953,000	48,688,000	37,420,000	35,833,000	31,279,000	44,261,000	32,613,000	33,520,000	27,349,000	38,043,000	26,322,000	27,312,000	22,851,000
Total current liabilities	US$ in thousands	141,218,000	114,206,000	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
Quick ratio		1.16	1.15	1.10	1.06	1.06	1.05	1.02	1.45	1.54	1.66	1.66	1.59	1.57	1.77	2.05	1.96	1.90	2.10	2.36	2.30

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 for Microsoft Corporation over the period from September 30, 2020, to June 30, 2025, exhibits a generally stable liquidity position with some gradual fluctuations. Initially, the ratio stood at 2.30 in September 2020, indicating that the company's liquid assets (excluding inventories) were more than twice its current liabilities, reflecting a strong liquidity buffer. This ratio increased slightly to 2.36 at the end of 2020, suggesting an improvement or maintenance of robust liquid assets relative to short-term obligations.

Throughout 2021, the quick ratio experienced a moderate decline, ending March 31, 2021, at 2.10 and then decreasing further to 1.90 by June 30, 2021. The subsequent quarters saw the ratio stabilize around the low 2s, with December 2021 reporting a ratio of 2.05. The downward trend resumed in early 2022, with the ratio dropping to 1.77 in March and further to 1.57 by June 2022, indicating a gradual reduction in liquid assets relative to current liabilities.

From late 2022 onward, the quick ratio continued to exhibit a declining trend, reaching 1.45 as of September 30, 2023. This represents a significant decline compared to earlier years, yet it remains above the 1.0 threshold, which generally signifies adequate liquidity to cover immediate liabilities. The ratio’s decline to 1.02 in December 2023 underscores this trend, approaching a more conservative liquidity stance.

In the period from early 2024 to mid-2025, the quick ratio demonstrated a slight recovery and stabilization, increasing marginally from 1.05 at the start of 2024 to values above 1.15 in mid-2025. These figures suggest that while liquidity has decreased from its earlier elevated levels, Microsoft maintains sufficient liquid assets to meet short-term obligations, with a consistent pattern of stability in recent periods.

Overall, the trend indicates a gradual depreciation of Microsoft’s quick ratio over time, from over 2.3 in 2020 to approximately 1.16 in mid-2025. Despite this decline, the ratio remains comfortably above 1.0, implying adequate liquidity and efficient management of liquid assets relative to current liabilities. However, the downward trend warrants attention as it reflects a reduced buffer, possibly correlated with strategic changes in asset composition, operational adjustments, or shifts in liquidity management practices.