Analysis of Liquidity Ratios
Liquidity ratios measure the company’s ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Microsoft Corp., liquidity ratios
Based on: 10-K (filing date: 2020-07-31), 10-K (filing date: 2019-08-01), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31).
| Liquidity ratio | Description | The company |
|---|---|---|
| Current ratio | A liquidity ratio calculated as current assets divided by current liabilities. | Microsoft Corp.’s current ratio deteriorated from 2018 to 2019 and from 2019 to 2020. |
| Quick ratio | A liquidity ratio calculated as (cash plus short-term marketable investments plus receivables) divided by current liabilities. | Microsoft Corp.’s quick ratio deteriorated from 2018 to 2019 and from 2019 to 2020. |
| Cash ratio | A liquidity ratio calculated as (cash plus short-term marketable investments) divided by current liabilities. | Microsoft Corp.’s cash ratio deteriorated from 2018 to 2019 and from 2019 to 2020. |
Current Ratio
Microsoft Corp., current ratio calculation, comparison to benchmarks
| Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current assets | 181,915 | 175,552 | 169,662 | 159,851 | 139,660 | 124,712 | |
| Current liabilities | 72,310 | 69,420 | 58,488 | 64,527 | 59,357 | 49,858 | |
| Liquidity Ratio | |||||||
| Current ratio1 | 2.52 | 2.53 | 2.90 | 2.48 | 2.35 | 2.50 | |
| Benchmarks | |||||||
| Current Ratio, Competitors2 | |||||||
| Accenture PLC | 1.40 | 1.40 | 1.34 | 1.23 | 1.35 | 1.36 | |
| Adobe Inc. | 1.48 | 0.79 | 1.13 | 2.05 | 2.08 | 2.18 | |
| Autodesk Inc. | 0.83 | 0.70 | 0.88 | 1.13 | 1.88 | — | |
| Automatic Data Processing Inc. | 1.05 | 1.05 | 1.05 | 1.10 | 1.10 | 1.06 | |
| Fidelity National Information Services Inc. | 0.80 | 0.84 | 1.19 | 0.92 | 1.36 | — | |
| International Business Machines Corp. | 0.98 | 1.02 | 1.29 | 1.33 | 1.21 | — | |
| Intuit Inc. | 2.26 | 1.83 | 1.14 | 0.73 | 0.72 | 1.47 | |
| Mastercard Inc. | 1.61 | 1.42 | 1.39 | 1.57 | 1.84 | — | |
| Oracle Corp. | 3.03 | 2.49 | 3.96 | 3.08 | 3.74 | — | |
| PayPal Holdings Inc. | 1.33 | 1.43 | 1.27 | 1.43 | 1.52 | — | |
| salesforce.com inc. | 1.08 | 0.95 | 0.92 | 0.83 | 0.77 | — | |
| ServiceNow Inc. | 1.21 | 1.03 | 1.17 | 1.15 | 1.25 | — | |
| Visa Inc. | 1.91 | 1.56 | 1.61 | 1.90 | 1.78 | — | |
| Current Ratio, Sector | |||||||
| Software & Services | 1.68 | 1.63 | 1.89 | 1.83 | 1.81 | — | |
| Current Ratio, Industry | |||||||
| Information Technology | 1.71 | 1.65 | 1.75 | 1.90 | 1.88 | — | |
Based on: 10-K (filing date: 2020-07-31), 10-K (filing date: 2019-08-01), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31).
1 2020 Calculation
Current ratio = Current assets ÷ Current liabilities
= 181,915 ÷ 72,310 = 2.52
2 Click competitor name to see calculations.
| Liquidity ratio | Description | The company |
|---|---|---|
| Current ratio | A liquidity ratio calculated as current assets divided by current liabilities. | Microsoft Corp.’s current ratio deteriorated from 2018 to 2019 and from 2019 to 2020. |
Quick Ratio
Microsoft Corp., quick ratio calculation, comparison to benchmarks
| Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Cash and cash equivalents | 13,576 | 11,356 | 11,946 | 7,663 | 6,510 | 5,595 | |
| Short-term investments | 122,951 | 122,463 | 121,822 | 125,318 | 106,730 | 90,931 | |
| Accounts receivable, net of allowance for doubtful accounts | 32,011 | 29,524 | 26,481 | 19,792 | 18,277 | 17,908 | |
| Total quick assets | 168,538 | 163,343 | 160,249 | 152,773 | 131,517 | 114,434 | |
| Current liabilities | 72,310 | 69,420 | 58,488 | 64,527 | 59,357 | 49,858 | |
| Liquidity Ratio | |||||||
| Quick ratio1 | 2.33 | 2.35 | 2.74 | 2.37 | 2.22 | 2.30 | |
| Benchmarks | |||||||
| Quick Ratio, Competitors2 | |||||||
| Accenture PLC | 1.29 | 1.29 | 1.24 | 1.12 | 1.25 | 1.18 | |
| Adobe Inc. | 1.34 | 0.70 | 1.06 | 2.00 | 1.99 | 2.11 | |
| Autodesk Inc. | 0.78 | 0.62 | 0.83 | 1.08 | 1.83 | — | |
| Automatic Data Processing Inc. | 0.14 | 0.13 | 0.14 | 0.15 | 0.14 | 0.12 | |
| Fidelity National Information Services Inc. | 0.78 | 0.81 | 1.10 | 0.85 | 0.98 | — | |
| International Business Machines Corp. | 0.83 | 0.87 | 1.12 | 1.19 | 1.04 | — | |
| Intuit Inc. | 2.04 | 1.44 | 0.86 | 0.45 | 0.53 | 1.03 | |
| Mastercard Inc. | 1.45 | 1.27 | 1.27 | 1.45 | 1.72 | — | |
| Oracle Corp. | 2.83 | 2.31 | 3.78 | 2.95 | 3.57 | — | |
| PayPal Holdings Inc. | 1.30 | 1.40 | 1.24 | 1.40 | 1.48 | — | |
| salesforce.com inc. | 0.95 | 0.82 | 0.83 | 0.74 | 0.68 | — | |
| ServiceNow Inc. | 1.10 | 0.92 | 1.03 | 1.05 | 1.14 | — | |
| Visa Inc. | 1.77 | 1.45 | 1.53 | 1.81 | 1.67 | — | |
| Quick Ratio, Sector | |||||||
| Software & Services | 1.46 | 1.39 | 1.65 | 1.61 | 1.53 | — | |
| Quick Ratio, Industry | |||||||
| Information Technology | 1.46 | 1.40 | 1.50 | 1.66 | 1.60 | — | |
Based on: 10-K (filing date: 2020-07-31), 10-K (filing date: 2019-08-01), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31).
1 2020 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 168,538 ÷ 72,310 = 2.33
2 Click competitor name to see calculations.
| Liquidity ratio | Description | The company |
|---|---|---|
| Quick ratio | A liquidity ratio calculated as (cash plus short-term marketable investments plus receivables) divided by current liabilities. | Microsoft Corp.’s quick ratio deteriorated from 2018 to 2019 and from 2019 to 2020. |
Cash Ratio
Microsoft Corp., cash ratio calculation, comparison to benchmarks
| Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Cash and cash equivalents | 13,576 | 11,356 | 11,946 | 7,663 | 6,510 | 5,595 | |
| Short-term investments | 122,951 | 122,463 | 121,822 | 125,318 | 106,730 | 90,931 | |
| Total cash assets | 136,527 | 133,819 | 133,768 | 132,981 | 113,240 | 96,526 | |
| Current liabilities | 72,310 | 69,420 | 58,488 | 64,527 | 59,357 | 49,858 | |
| Liquidity Ratio | |||||||
| Cash ratio1 | 1.89 | 1.93 | 2.29 | 2.06 | 1.91 | 1.94 | |
| Benchmarks | |||||||
| Cash Ratio, Competitors2 | |||||||
| Accenture PLC | 0.67 | 0.55 | 0.50 | 0.42 | 0.55 | 0.51 | |
| Adobe Inc. | 1.09 | 0.51 | 0.75 | 1.65 | 1.69 | 1.80 | |
| Autodesk Inc. | 0.57 | 0.41 | 0.62 | 0.87 | 1.41 | — | |
| Automatic Data Processing Inc. | 0.06 | 0.06 | 0.07 | 0.09 | 0.09 | 0.06 | |
| Fidelity National Information Services Inc. | 0.42 | 0.39 | 0.45 | 0.34 | 0.38 | — | |
| International Business Machines Corp. | 0.36 | 0.24 | 0.32 | 0.34 | 0.24 | — | |
| Intuit Inc. | 2.00 | 1.39 | 0.81 | 0.40 | 0.48 | 0.97 | |
| Mastercard Inc. | 1.09 | 0.81 | 0.86 | 1.07 | 1.37 | — | |
| Oracle Corp. | 2.50 | 2.03 | 3.50 | 2.73 | 3.26 | — | |
| PayPal Holdings Inc. | 1.21 | 1.24 | 1.13 | 1.05 | 1.15 | — | |
| salesforce.com inc. | 0.54 | 0.39 | 0.45 | 0.30 | 0.24 | — | |
| ServiceNow Inc. | 0.83 | 0.61 | 0.74 | 0.85 | 0.84 | — | |
| Visa Inc. | 1.57 | 1.11 | 1.28 | 1.56 | 1.36 | — | |
| Cash Ratio, Sector | |||||||
| Software & Services | 1.13 | 1.02 | 1.26 | 1.23 | 1.15 | — | |
| Cash Ratio, Industry | |||||||
| Information Technology | 1.10 | 1.01 | 1.08 | 1.28 | 1.22 | — | |
Based on: 10-K (filing date: 2020-07-31), 10-K (filing date: 2019-08-01), 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31).
1 2020 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 136,527 ÷ 72,310 = 1.89
2 Click competitor name to see calculations.
| Liquidity ratio | Description | The company |
|---|---|---|
| Cash ratio | A liquidity ratio calculated as (cash plus short-term marketable investments) divided by current liabilities. | Microsoft Corp.’s cash ratio deteriorated from 2018 to 2019 and from 2019 to 2020. |