Current Ratio
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- Cash Flow Statement
- Analysis of Liquidity Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Operating Profit Margin since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Revenues
- Aggregate Accruals
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Calculation
Microsoft Corp., current ratio, long-term trends, calculation
| Current ratio | = | Current assets1 | ÷ | Current liabilities1 | |
|---|---|---|---|---|---|
| Jun 30, 2024 | = | ÷ | |||
| Jun 30, 2023 | = | ÷ | |||
| Jun 30, 2022 | = | ÷ | |||
| Jun 30, 2021 | = | ÷ | |||
| Jun 30, 2020 | = | ÷ | |||
| Jun 30, 2019 | = | ÷ | |||
| Jun 30, 2018 | = | ÷ | |||
| Jun 30, 2017 | = | ÷ | |||
| Jun 30, 2016 | = | ÷ | |||
| Jun 30, 2015 | = | ÷ | |||
| Jun 30, 2014 | = | ÷ | |||
| Jun 30, 2013 | = | ÷ | |||
| Jun 30, 2012 | = | ÷ | |||
| Jun 30, 2011 | = | ÷ | |||
| Jun 30, 2010 | = | ÷ | |||
| Jun 30, 2009 | = | ÷ | |||
| Jun 30, 2008 | = | ÷ | |||
| Jun 30, 2007 | = | ÷ | |||
| Jun 30, 2006 | = | ÷ | |||
| Jun 30, 2005 | = | ÷ |
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30), 10-K (reporting date: 2012-06-30), 10-K (reporting date: 2011-06-30), 10-K (reporting date: 2010-06-30), 10-K (reporting date: 2009-06-30), 10-K (reporting date: 2008-06-30), 10-K (reporting date: 2007-06-30), 10-K (reporting date: 2006-06-30), 10-K (reporting date: 2005-06-30).
1 US$ in millions
The analysis of the financial data over the examined periods reveals several notable trends concerning liquidity and working capital management.
- Current Assets
- Current assets have generally shown an upward trend from 2005 through 2021, increasing from approximately 48.7 billion US dollars to a peak of around 184.4 billion US dollars in 2021. This reflects a substantial accumulation of liquid or near-liquid assets by the company over these years. However, there is a noticeable decline after 2021, with current assets decreasing to about 159.7 billion US dollars by 2024, indicating a possible shift in asset management or use of current assets.
- Current Liabilities
- Current liabilities have also increased throughout the period but at a generally faster rate compared to current assets, growing from about 16.9 billion US dollars in 2005 to approximately 125.3 billion US dollars by 2024. This increase suggests rising short-term obligations, which could impact liquidity if not properly managed. The steady rise in current liabilities outpaces growth in current assets, especially from 2021 onwards.
- Current Ratio
- The current ratio, a key liquidity metric, displays considerable fluctuations over the years. It started at a strong 2.89 in 2005, signaling abundant short-term liquidity, then declined steadily to 1.27 by 2024. The ratio remained above 2.0 for much of the period between 2005 and 2018, indicating comfortable liquidity during these years. However, from 2018 onward, the ratio decreases steadily below 2.0 and approaches closer to 1.0 by 2024. This trend suggests a gradual erosion of the company's short-term liquidity cushion.
In sum, while current assets have generally increased over the long term, the growth in current liabilities has been proportionally higher, exerting downward pressure on the current ratio and indicating a weakening liquidity position in more recent years. The decline in the current ratio, especially after 2018, warrants attention as it signals reduced ability to cover short-term obligations with short-term assets. The reduction in current assets beginning in 2022 further emphasizes this trend and may reflect changes in operational strategy, asset allocation, or cash utilization that could impact liquidity and working capital needs going forward.
Comparison to Competitors
Microsoft Corp., current ratio, long-term trends, comparison to competitors
| Microsoft Corp. | Accenture PLC | Adobe Inc. | Cadence Design Systems Inc. | CrowdStrike Holdings Inc. | Fair Isaac Corp. | International Business Machines Corp. | Intuit Inc. | Oracle Corp. | Palantir Technologies Inc. | Palo Alto Networks Inc. | Salesforce Inc. | ServiceNow Inc. | Synopsys Inc. | Workday Inc. | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30), 10-K (reporting date: 2012-06-30), 10-K (reporting date: 2011-06-30), 10-K (reporting date: 2010-06-30), 10-K (reporting date: 2009-06-30), 10-K (reporting date: 2008-06-30), 10-K (reporting date: 2007-06-30), 10-K (reporting date: 2006-06-30), 10-K (reporting date: 2005-06-30).
Comparison to Sector (Software & Services)
Microsoft Corp., current ratio, long-term trends, comparison to sector (software & services)
| Microsoft Corp. | Software & Services | |
|---|---|---|
| Jun 30, 2024 | ||
| Jun 30, 2023 | ||
| Jun 30, 2022 | ||
| Jun 30, 2021 | ||
| Jun 30, 2020 | ||
| Jun 30, 2019 | ||
| Jun 30, 2018 | ||
| Jun 30, 2017 | ||
| Jun 30, 2016 | ||
| Jun 30, 2015 | ||
| Jun 30, 2014 | ||
| Jun 30, 2013 | ||
| Jun 30, 2012 | ||
| Jun 30, 2011 | ||
| Jun 30, 2010 | ||
| Jun 30, 2009 | ||
| Jun 30, 2008 | ||
| Jun 30, 2007 | ||
| Jun 30, 2006 | ||
| Jun 30, 2005 |
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30), 10-K (reporting date: 2012-06-30), 10-K (reporting date: 2011-06-30), 10-K (reporting date: 2010-06-30), 10-K (reporting date: 2009-06-30), 10-K (reporting date: 2008-06-30), 10-K (reporting date: 2007-06-30), 10-K (reporting date: 2006-06-30), 10-K (reporting date: 2005-06-30).
Comparison to Industry (Information Technology)
Microsoft Corp., current ratio, long-term trends, comparison to industry (information technology)
| Microsoft Corp. | Information Technology | |
|---|---|---|
| Jun 30, 2024 | ||
| Jun 30, 2023 | ||
| Jun 30, 2022 | ||
| Jun 30, 2021 | ||
| Jun 30, 2020 | ||
| Jun 30, 2019 | ||
| Jun 30, 2018 | ||
| Jun 30, 2017 | ||
| Jun 30, 2016 | ||
| Jun 30, 2015 | ||
| Jun 30, 2014 | ||
| Jun 30, 2013 | ||
| Jun 30, 2012 | ||
| Jun 30, 2011 | ||
| Jun 30, 2010 | ||
| Jun 30, 2009 | ||
| Jun 30, 2008 | ||
| Jun 30, 2007 | ||
| Jun 30, 2006 | ||
| Jun 30, 2005 |
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30), 10-K (reporting date: 2012-06-30), 10-K (reporting date: 2011-06-30), 10-K (reporting date: 2010-06-30), 10-K (reporting date: 2009-06-30), 10-K (reporting date: 2008-06-30), 10-K (reporting date: 2007-06-30), 10-K (reporting date: 2006-06-30), 10-K (reporting date: 2005-06-30).