Stock Analysis on Net

Microsoft Corp. (NASDAQ:MSFT)

Analysis of Short-term (Operating) Activity Ratios 

Microsoft Excel

Short-term Activity Ratios (Summary)

Microsoft Corp., short-term (operating) activity ratios

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Turnover Ratios
Inventory turnover 16.74 19.81 24.32 20.80 14.41 15.71
Receivables turnover 4.48 4.42 4.47 4.26 4.17 4.54
Payables turnover 3.30 3.44 3.68 4.57 4.45 4.64
Working capital turnover 2.66 1.76 1.30 1.19 0.99 0.94
Average No. Days
Average inventory processing period 22 18 15 18 25 23
Add: Average receivable collection period 81 83 82 86 88 80
Operating cycle 103 101 97 104 113 103
Less: Average payables payment period 111 106 99 80 82 79
Cash conversion cycle -8 -5 -2 24 31 24

Based on: 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).

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Microsoft Corp. inventory turnover ratio deteriorated from 2020 to 2021 and from 2021 to 2022.
Receivables turnover An activity ratio equal to revenue divided by receivables. Microsoft Corp. receivables turnover ratio deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Microsoft Corp. payables turnover ratio decreased from 2020 to 2021 and from 2021 to 2022.
Working capital turnover An activity ratio calculated as revenue divided by working capital. Microsoft Corp. working capital turnover ratio improved from 2020 to 2021 and from 2021 to 2022.

Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Microsoft Corp. number of days of inventory outstanding deteriorated from 2020 to 2021 and from 2021 to 2022.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. Microsoft Corp. number of days of receivables outstanding deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.
Operating cycle Equal to average inventory processing period plus average receivables collection period. Microsoft Corp. operating cycle deteriorated from 2020 to 2021 and from 2021 to 2022.
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Microsoft Corp. number of days of payables outstanding increased from 2020 to 2021 and from 2021 to 2022.
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Microsoft Corp. cash conversion cycle improved from 2020 to 2021 and from 2021 to 2022.

Inventory Turnover

Microsoft Corp., inventory turnover calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Selected Financial Data (US$ in millions)
Cost of revenue 62,650 52,232 46,078 42,910 38,353 34,261
Inventories 3,742 2,636 1,895 2,063 2,662 2,181
Short-term Activity Ratio
Inventory turnover1 16.74 19.81 24.32 20.80 14.41 15.71
Benchmarks
Inventory Turnover, Competitors2
International Business Machines Corp. 17.94 15.68 20.69 25.11 25.36
Oracle Corp. 28.27 55.32 37.62 24.98 20.30 24.90
Inventory Turnover, Sector
Software & Services 43.21 46.87 50.11 48.17 38.04
Inventory Turnover, Industry
Information Technology 9.60 11.40 12.09 12.18 12.52

Based on: 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).

1 2022 Calculation
Inventory turnover = Cost of revenue ÷ Inventories
= 62,650 ÷ 3,742 = 16.74

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Microsoft Corp. inventory turnover ratio deteriorated from 2020 to 2021 and from 2021 to 2022.

Receivables Turnover

Microsoft Corp., receivables turnover calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Selected Financial Data (US$ in millions)
Revenue 198,270 168,088 143,015 125,843 110,360 89,950
Accounts receivable, net of allowance for doubtful accounts 44,261 38,043 32,011 29,524 26,481 19,792
Short-term Activity Ratio
Receivables turnover1 4.48 4.42 4.47 4.26 4.17 4.54
Benchmarks
Receivables Turnover, Competitors2
Accenture PLC 5.87 5.74 6.16 5.79 8.33 8.05
Adobe Inc. 8.53 8.41 9.20 7.28 6.86 5.99
Fidelity National Information Services Inc. 5.31 11.40 18.96 15.97 29.98
International Business Machines Corp. 9.25 8.49 10.32 9.80 10.71
Intuit Inc. 28.53 24.64 51.54 77.98 60.86 50.26
Mastercard Inc. 17.51 14.32 8.97 5.64 6.10
Oracle Corp. 7.13 7.48 7.04 7.69 7.55 7.12
PayPal Holdings Inc. 28.58 31.71 37.18 40.86 49.36
Salesforce Inc. 2.72 2.73 2.77 2.70 2.68
ServiceNow Inc. 4.20 4.24 4.48 4.14 4.54
Visa Inc. 15.17 13.71 17.28 7.54 13.03 12.91
Receivables Turnover, Sector
Software & Services 5.91 5.97 6.38 6.02 6.56
Receivables Turnover, Industry
Information Technology 7.78 7.90 8.42 7.73 8.01

Based on: 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).

1 2022 Calculation
Receivables turnover = Revenue ÷ Accounts receivable, net of allowance for doubtful accounts
= 198,270 ÷ 44,261 = 4.48

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. Microsoft Corp. receivables turnover ratio deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.

Payables Turnover

Microsoft Corp., payables turnover calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Selected Financial Data (US$ in millions)
Cost of revenue 62,650 52,232 46,078 42,910 38,353 34,261
Accounts payable 19,000 15,163 12,530 9,382 8,617 7,390
Short-term Activity Ratio
Payables turnover1 3.30 3.44 3.68 4.57 4.45 4.64
Benchmarks
Payables Turnover, Competitors2
Accenture PLC 16.37 15.03 22.48 18.16 21.62 16.87
Adobe Inc. 5.71 5.98 5.63 7.98 6.42 8.90
Fidelity National Information Services Inc. 1.31 1.64 1.69 1.56 5.73
International Business Machines Corp. 6.87 6.54 7.75 8.30 6.50
Intuit Inc. 3.26 2.70 4.52 4.26 5.49 5.15
Mastercard Inc. 20.02 20.68 10.37 6.22 6.83
Oracle Corp. 6.74 10.54 12.46 13.78 15.28 12.47
PayPal Holdings Inc. 218.40 128.79 85.13 76.60 54.99
Salesforce Inc.
ServiceNow Inc. 5.74 15.20 28.83 15.04 20.26
Visa Inc. 8.93 9.87 12.58 5.76 9.51 9.17
Payables Turnover, Sector
Software & Services 6.12 6.48 6.94 6.84 7.82
Payables Turnover, Industry
Information Technology 4.79 5.29 5.58 5.31 4.93

Based on: 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).

1 2022 Calculation
Payables turnover = Cost of revenue ÷ Accounts payable
= 62,650 ÷ 19,000 = 3.30

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Microsoft Corp. payables turnover ratio decreased from 2020 to 2021 and from 2021 to 2022.

Working Capital Turnover

Microsoft Corp., working capital turnover calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Selected Financial Data (US$ in millions)
Current assets 169,684 184,406 181,915 175,552 169,662 159,851
Less: Current liabilities 95,082 88,657 72,310 69,420 58,488 64,527
Working capital 74,602 95,749 109,605 106,132 111,174 95,324
 
Revenue 198,270 168,088 143,015 125,843 110,360 89,950
Short-term Activity Ratio
Working capital turnover1 2.66 1.76 1.30 1.19 0.99 0.94
Benchmarks
Working Capital Turnover, Competitors2
Accenture PLC 15.07 12.77 8.71 9.85 12.12 16.17
Adobe Inc. 20.28 9.09 4.89 16.24 1.96
Fidelity National Information Services Inc. 13.85
International Business Machines Corp. 107.30 7.29
Intuit Inc. 8.98 3.85 1.73 4.17 20.71
Mastercard Inc. 9.13 4.99 2.11 3.38 3.27
Oracle Corp. 3.50 1.29 1.12 1.42 0.70 0.75
PayPal Holdings Inc. 2.22 2.66 1.71 1.54 2.19
Salesforce Inc. 24.95 5.11 15.29
ServiceNow Inc. 11.16 21.76 5.76 46.69 7.86
Visa Inc. 3.13 2.03 1.66 3.04 2.98 2.03
Working Capital Turnover, Sector
Software & Services 4.60 2.87 2.19 2.41 1.78
Working Capital Turnover, Industry
Information Technology 5.50 3.84 2.82 3.06 2.78

Based on: 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).

1 2022 Calculation
Working capital turnover = Revenue ÷ Working capital
= 198,270 ÷ 74,602 = 2.66

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital. Microsoft Corp. working capital turnover ratio improved from 2020 to 2021 and from 2021 to 2022.

Average Inventory Processing Period

Microsoft Corp., average inventory processing period calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Selected Financial Data
Inventory turnover 16.74 19.81 24.32 20.80 14.41 15.71
Short-term Activity Ratio (no. days)
Average inventory processing period1 22 18 15 18 25 23
Benchmarks (no. days)
Average Inventory Processing Period, Competitors2
International Business Machines Corp. 20 23 18 15 14
Oracle Corp. 13 7 10 15 18 15
Average Inventory Processing Period, Sector
Software & Services 8 8 7 8 10
Average Inventory Processing Period, Industry
Information Technology 38 32 30 30 29

Based on: 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).

1 2022 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 16.74 = 22

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Microsoft Corp. number of days of inventory outstanding deteriorated from 2020 to 2021 and from 2021 to 2022.

Average Receivable Collection Period

Microsoft Corp., average receivable collection period calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Selected Financial Data
Receivables turnover 4.48 4.42 4.47 4.26 4.17 4.54
Short-term Activity Ratio (no. days)
Average receivable collection period1 81 83 82 86 88 80
Benchmarks (no. days)
Average Receivable Collection Period, Competitors2
Accenture PLC 62 64 59 63 44 45
Adobe Inc. 43 43 40 50 53 61
Fidelity National Information Services Inc. 69 32 19 23 12
International Business Machines Corp. 39 43 35 37 34
Intuit Inc. 13 15 7 5 6 7
Mastercard Inc. 21 25 41 65 60
Oracle Corp. 51 49 52 47 48 51
PayPal Holdings Inc. 13 12 10 9 7
Salesforce Inc. 134 134 132 135 136
ServiceNow Inc. 87 86 82 88 80
Visa Inc. 24 27 21 48 28 28
Average Receivable Collection Period, Sector
Software & Services 62 61 57 61 56
Average Receivable Collection Period, Industry
Information Technology 47 46 43 47 46

Based on: 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).

1 2022 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 4.48 = 81

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. Microsoft Corp. number of days of receivables outstanding deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.

Operating Cycle

Microsoft Corp., operating cycle calculation, comparison to benchmarks

No. days

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Selected Financial Data
Average inventory processing period 22 18 15 18 25 23
Average receivable collection period 81 83 82 86 88 80
Short-term Activity Ratio
Operating cycle1 103 101 97 104 113 103
Benchmarks
Operating Cycle, Competitors2
International Business Machines Corp. 59 66 53 52 48
Oracle Corp. 64 56 62 62 66 66
Operating Cycle, Sector
Software & Services 70 69 64 69 66
Operating Cycle, Industry
Information Technology 85 78 73 77 75

Based on: 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).

1 2022 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 22 + 81 = 103

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. Microsoft Corp. operating cycle deteriorated from 2020 to 2021 and from 2021 to 2022.

Average Payables Payment Period

Microsoft Corp., average payables payment period calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Selected Financial Data
Payables turnover 3.30 3.44 3.68 4.57 4.45 4.64
Short-term Activity Ratio (no. days)
Average payables payment period1 111 106 99 80 82 79
Benchmarks (no. days)
Average Payables Payment Period, Competitors2
Accenture PLC 22 24 16 20 17 22
Adobe Inc. 64 61 65 46 57 41
Fidelity National Information Services Inc. 279 223 216 233 64
International Business Machines Corp. 53 56 47 44 56
Intuit Inc. 112 135 81 86 66 71
Mastercard Inc. 18 18 35 59 53
Oracle Corp. 54 35 29 26 24 29
PayPal Holdings Inc. 2 3 4 5 7
Salesforce Inc.
ServiceNow Inc. 64 24 13 24 18
Visa Inc. 41 37 29 63 38 40
Average Payables Payment Period, Sector
Software & Services 60 56 53 53 47
Average Payables Payment Period, Industry
Information Technology 76 69 65 69 74

Based on: 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).

1 2022 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 3.30 = 111

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Microsoft Corp. number of days of payables outstanding increased from 2020 to 2021 and from 2021 to 2022.

Cash Conversion Cycle

Microsoft Corp., cash conversion cycle calculation, comparison to benchmarks

No. days

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Selected Financial Data
Average inventory processing period 22 18 15 18 25 23
Average receivable collection period 81 83 82 86 88 80
Average payables payment period 111 106 99 80 82 79
Short-term Activity Ratio
Cash conversion cycle1 -8 -5 -2 24 31 24
Benchmarks
Cash Conversion Cycle, Competitors2
International Business Machines Corp. 6 10 6 8 -8
Oracle Corp. 10 21 33 36 42 37
Cash Conversion Cycle, Sector
Software & Services 10 13 11 16 19
Cash Conversion Cycle, Industry
Information Technology 9 9 8 8 1

Based on: 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).

1 2022 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 22 + 81111 = -8

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Microsoft Corp. cash conversion cycle improved from 2020 to 2021 and from 2021 to 2022.