Analysis of Short-term (Operating) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Short-term Activity Ratios (Summary)
Microsoft Corp., short-term (operating) activity ratios
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
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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 + 81 – 111 = -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. |