Microsoft Corporation (MSFT)

Quick ratio

		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	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cash	US$ in thousands	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	13,117,000	11,356,000	11,212,000
Short-term investments	US$ in thousands	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	123,519,000	122,463,000	120,406,000
Receivables	US$ in thousands	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	19,087,000	29,524,000	19,269,000
Total current liabilities	US$ in thousands	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	58,118,000	69,420,000	53,861,000
Quick ratio		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	2.68	2.35	2.80

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($17,305,000K + $63,712,000K + $42,831,000K) ÷ $121,016,000K
= 1.02

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 (such as cash, marketable securities, and accounts receivable) by current liabilities.

In the case of Microsoft Corporation, the quick ratio has shown consistent fluctuations over the past eight quarters. The quick ratio decreased from 1.95 in March 2022 to 1.20 in December 2023. This decline may indicate a potential decrease in the company's short-term liquidity and ability to cover its current liabilities.

A quick ratio of 1.20 as of December 31, 2023, implies that Microsoft has $1.20 of liquid assets available for every $1 of current liabilities. While a quick ratio above 1.0 generally indicates that a company can meet its short-term obligations, a decreasing trend may warrant closer monitoring of Microsoft's liquidity position.

It is important to consider the specific circumstances and industry benchmarks when interpreting the quick ratio. Further analysis of Microsoft's cash flow, accounts receivable management, and overall financial health can provide a more comprehensive understanding of its liquidity position and ability to meet its short-term obligations.