Analysis of Short-term (Operating) Activity Ratios
Quarterly Data
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 (quarterly data)
Based on: 10-K (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-Q (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-K (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30).
The operational activity ratios exhibit a significant shift in efficiency and liquidity management over the analyzed period. A notable trend is the aggressive optimization of inventory and the strategic extension of payment terms to suppliers, which has fundamentally altered the cash conversion dynamics of the organization.
- Inventory Management
- A substantial increase in inventory turnover is observed, rising from 16.09 in September 2021 to a peak of 98.47 in December 2024. This acceleration is reflected in the average inventory processing period, which contracted from 23 days to a consistent 4 to 5 days in the later periods. This indicates a transition toward a highly lean inventory model with rapid throughput.
- Receivables Management
- Receivables turnover remains relatively stable, fluctuating between 4.03 and 6.49. The average receivable collection period demonstrates periodic volatility, typically ranging between 56 and 91 days. There is a recurring seasonal peak in collection days observed around June of each year, suggesting a cyclical pattern in customer payment behavior.
- Payables Management
- A gradual decline in payables turnover is evident, moving from 3.70 in September 2021 to 2.51 by June 2026. Consequently, the average payables payment period has expanded significantly, increasing from 99 days to 146 days. This trend indicates a strategic shift toward extending credit terms with vendors, effectively utilizing supplier financing to support operations.
- Working Capital and Cash Conversion Cycle
- Working capital turnover experienced a sharp increase starting in December 2023, jumping from 2.64 to 8.63, and remaining elevated thereafter. The cash conversion cycle has remained consistently negative throughout the period, indicating that the organization recovers its investment in inventory and receivables before its payables become due. This negative cycle deepened significantly from -19 days in September 2021 to a low of -70 days in December 2025, ending at -52 days in June 2026, which underscores a highly efficient liquidity position funded by operating liabilities.
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Turnover Ratios
Average No. Days
Inventory Turnover
Microsoft Corp., inventory turnover calculation (quarterly data)
| Jun 30, 2026 | Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||
| Cost of revenue | 29,525) | 26,828) | 25,978) | 24,043) | 24,014) | 21,919) | 21,799) | 20,099) | 19,684) | 18,505) | 19,623) | 16,302) | 16,795) | 16,128) | 17,488) | 15,452) | 16,429) | 15,615) | 16,960) | 13,646) | ||||||
| Inventories | 1,397) | 1,219) | 1,059) | 1,130) | 938) | 848) | 909) | 1,626) | 1,246) | 1,304) | 1,615) | 3,000) | 2,500) | 2,877) | 2,980) | 4,268) | 3,742) | 3,296) | 3,019) | 3,411) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||
| Inventory turnover1 | 76.14 | 82.74 | 90.61 | 81.22 | 93.64 | 98.47 | 88.10 | 47.92 | 59.48 | 54.62 | 42.63 | 22.24 | 26.35 | 22.77 | 21.81 | 15.10 | 16.74 | 18.27 | 19.09 | 16.09 | ||||||
| Benchmarks | ||||||||||||||||||||||||||
| Inventory Turnover, Competitors2 | ||||||||||||||||||||||||||
| Cadence Design Systems Inc. | — | — | 2.11 | 2.42 | 2.38 | 2.63 | 3.25 | 3.06 | 2.51 | 1.81 | 2.79 | 2.35 | 2.39 | 2.59 | 2.88 | 3.12 | 2.90 | 3.04 | 3.17 | 2.91 | ||||||
| International Business Machines Corp. | — | — | 16.58 | 19.44 | 23.15 | 19.75 | 21.72 | 18.86 | 21.10 | 19.90 | 22.19 | 22.72 | 23.74 | 19.66 | 18.29 | 17.30 | 17.94 | 15.59 | 16.30 | 14.96 | ||||||
| Synopsys Inc. | — | 5.43 | 5.21 | 5.06 | 4.45 | 3.52 | 3.17 | 2.98 | 3.44 | 3.12 | 3.23 | 3.18 | 3.75 | 4.15 | 4.43 | 4.94 | 5.02 | 4.62 | 4.45 | 4.28 | ||||||
Based on: 10-K (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-Q (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-K (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30).
1 Q4 2026 Calculation
Inventory turnover
= (Cost of revenueQ4 2026
+ Cost of revenueQ3 2026
+ Cost of revenueQ2 2026
+ Cost of revenueQ1 2026)
÷ Inventories
= (29,525 + 26,828 + 25,978 + 24,043)
÷ 1,397 = 76.14
2 Click competitor name to see calculations.
An analysis of short-term operating activity reveals a dramatic shift in inventory management efficiency and strategy between September 2021 and June 2026. While the cost of revenue experienced consistent growth, the volume of held inventory decreased substantially, leading to a significant acceleration in the inventory turnover ratio.
- Cost of Revenue Trends
- Cost of revenue demonstrates a sustained upward trajectory, rising from 13,646 million USD in September 2021 to 29,525 million USD by June 2026. This growth reflects a substantial expansion in operational scale, with the cost of revenue more than doubling over the observed period.
- Inventory Level Dynamics
- Inventory levels remained relatively volatile but stable between September 2021 and September 2023, ranging from 2,500 million USD to a peak of 4,268 million USD. A decisive contraction began in December 2023, as inventory dropped to 1,615 million USD. This downward trend continued into 2024, reaching a minimum of 848 million USD in December 2024. For the remainder of the period, inventory levels stabilized at a significantly lower baseline, generally fluctuating between 848 million USD and 1,397 million USD.
- Inventory Turnover Performance
- The inventory turnover ratio underwent a profound transformation, moving from a moderate range of 15.10 to 26.35 in the initial years to extreme efficiency levels starting in late 2023. A sharp inflection point occurred in December 2023, when the ratio climbed to 42.63. The ratio continued to escalate, peaking at 98.47 in March 2025. In the final quarters of the analysis, the turnover ratio remained elevated, fluctuating between 76.14 and 90.61. This pattern indicates a transition toward a highly lean inventory model or a fundamental shift in the business mix toward digital offerings that require negligible physical stock.
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Receivables Turnover
Microsoft Corp., receivables turnover calculation (quarterly data)
| Jun 30, 2026 | Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||
| Revenue | 90,007) | 82,886) | 81,273) | 77,673) | 76,441) | 70,066) | 69,632) | 65,585) | 64,727) | 61,858) | 62,020) | 56,517) | 56,189) | 52,857) | 52,747) | 50,122) | 51,865) | 49,360) | 51,728) | 45,317) | ||||||
| Accounts receivable, net of allowance for doubtful accounts | 80,876) | 60,041) | 56,535) | 52,894) | 69,905) | 51,700) | 48,188) | 44,148) | 56,924) | 44,029) | 42,831) | 36,953) | 48,688) | 37,420) | 35,833) | 31,279) | 44,261) | 32,613) | 33,520) | 27,349) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||
| Receivables turnover1 | 4.10 | 5.30 | 5.40 | 5.55 | 4.03 | 5.22 | 5.43 | 5.76 | 4.31 | 5.37 | 5.31 | 5.91 | 4.35 | 5.55 | 5.70 | 6.49 | 4.48 | 5.90 | 5.52 | 6.44 | ||||||
| Benchmarks | ||||||||||||||||||||||||||
| Receivables Turnover, Competitors2 | ||||||||||||||||||||||||||
| Adobe Inc. | — | — | 12.64 | 11.69 | 10.14 | 11.08 | 13.03 | 11.17 | 10.38 | 11.62 | 12.67 | 9.69 | 8.73 | 10.20 | 10.94 | 9.99 | 8.53 | 9.98 | 10.51 | 9.58 | ||||||
| AppLovin Corp. | — | — | 3.15 | 3.15 | 3.01 | 3.24 | 3.15 | 3.05 | 3.33 | 3.61 | 3.68 | 3.50 | 3.44 | 3.57 | 4.30 | 4.56 | 4.01 | 4.37 | 4.23 | 4.11 | ||||||
| Cadence Design Systems Inc. | — | — | 5.48 | 5.35 | 5.61 | 6.90 | 7.59 | 8.39 | 6.82 | 7.76 | 7.37 | 10.46 | 8.36 | 9.19 | 8.62 | 7.54 | 7.32 | 8.78 | 8.38 | 8.72 | ||||||
| Datadog Inc. | — | — | 4.79 | 5.40 | 4.62 | 5.84 | 4.99 | 5.78 | 4.48 | 5.21 | 4.49 | 5.01 | 4.18 | 5.01 | 5.70 | 4.89 | 4.19 | 4.39 | 4.47 | 4.33 | ||||||
| International Business Machines Corp. | — | — | 11.43 | 10.61 | 8.33 | 11.82 | 10.72 | 10.73 | 9.22 | 11.61 | 10.81 | 10.27 | 8.57 | 11.48 | 10.67 | 10.52 | 9.25 | 10.95 | 10.17 | 9.79 | ||||||
| Intuit Inc. | — | 25.09 | 17.12 | 33.56 | 35.53 | 25.12 | 16.88 | 38.94 | 35.63 | 20.02 | 16.27 | 39.65 | 35.48 | 19.62 | 15.15 | 34.68 | 28.53 | 17.44 | 12.84 | 25.10 | ||||||
| Oracle Corp. | 6.49 | 5.98 | 6.46 | 6.67 | 6.71 | 6.93 | 6.72 | 6.71 | 6.73 | 7.20 | 7.59 | 7.82 | 7.22 | 7.72 | 7.43 | 7.44 | 7.13 | 9.12 | 9.28 | 9.11 | ||||||
| Palantir Technologies Inc. | — | — | 4.14 | 3.72 | 4.29 | 3.87 | 4.60 | 4.30 | 4.98 | 3.96 | 3.76 | 4.79 | 6.10 | 4.94 | 5.44 | 7.81 | 7.38 | 5.33 | 6.56 | 6.42 | ||||||
| Palo Alto Networks Inc. | — | 3.72 | 4.68 | 7.12 | 3.11 | 4.55 | 5.73 | 7.32 | 3.07 | 4.54 | 3.97 | 5.10 | 2.80 | 4.50 | 4.82 | 4.70 | 2.57 | 4.17 | 5.10 | 5.61 | ||||||
| Salesforce Inc. | 2.90 | 7.37 | 7.06 | 8.86 | 3.17 | 7.84 | 6.76 | 8.36 | 3.05 | 7.00 | 6.12 | 6.95 | 2.92 | 7.09 | 6.18 | 7.07 | 2.72 | 6.22 | 5.78 | 7.04 | ||||||
| ServiceNow Inc. | — | — | 6.69 | 8.15 | 5.05 | 8.18 | 7.11 | 8.44 | 4.90 | 8.00 | 6.56 | 7.26 | 4.41 | 7.26 | 7.33 | 6.87 | 4.20 | 7.71 | 7.74 | 7.59 | ||||||
| Synopsys Inc. | — | 7.14 | 6.85 | 4.88 | 4.69 | 4.62 | 6.21 | 6.80 | 6.56 | 7.56 | 7.25 | 5.63 | 6.17 | 8.29 | 6.78 | 5.00 | 6.38 | 7.25 | 6.58 | 4.34 | ||||||
| Workday Inc. | 4.10 | 5.27 | 5.57 | 6.38 | 4.33 | 5.81 | 6.09 | 6.68 | 4.43 | 5.70 | 5.28 | 5.94 | 3.96 | 5.71 | 5.13 | 6.94 | 4.14 | 5.66 | 5.35 | 6.91 | ||||||
Based on: 10-K (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-Q (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-K (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30).
1 Q4 2026 Calculation
Receivables turnover
= (RevenueQ4 2026
+ RevenueQ3 2026
+ RevenueQ2 2026
+ RevenueQ1 2026)
÷ Accounts receivable, net of allowance for doubtful accounts
= (90,007 + 82,886 + 81,273 + 77,673)
÷ 80,876 = 4.10
2 Click competitor name to see calculations.
Revenue demonstrates a consistent long-term growth trajectory, increasing from 45,317 million USD in September 2021 to 90,007 million USD by June 2026. Despite this expansion in top-line growth, the efficiency of receivables collection exhibits a distinct cyclical pattern characterized by periodic fluctuations in the turnover ratio.
- Revenue and Receivables Correlation
- Top-line revenue shows a sustained upward trend, nearly doubling over the analyzed period. Accounts receivable, net of allowance, followed a general upward trajectory but exhibited significant quarterly volatility, with notable peaks occurring consistently in the June quarters of each year.
- Seasonality of Receivables Turnover
- A recurring seasonal contraction in the receivables turnover ratio is evident every June. The ratio declined to 4.48 in June 2022, 4.35 in June 2023, 4.31 in June 2024, 4.03 in June 2025, and 4.10 in June 2026. These troughs are systematically followed by a recovery in the September and December quarters, where the ratio typically returns to higher efficiency levels, such as 6.49 in September 2022 and 5.76 in September 2024.
- Long-term Efficiency Trends
- While the cyclical nature of the ratio is the most prominent feature, a subtle long-term downward trend in turnover efficiency is observable. The peak ratios have gradually decreased from 6.44 in September 2021 to 5.43 in September 2024, suggesting a slight increase in the average time required to collect outstanding receivables relative to the growth in revenue.
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Payables Turnover
Microsoft Corp., payables turnover calculation (quarterly data)
| Jun 30, 2026 | Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||
| Cost of revenue | 29,525) | 26,828) | 25,978) | 24,043) | 24,014) | 21,919) | 21,799) | 20,099) | 19,684) | 18,505) | 19,623) | 16,302) | 16,795) | 16,128) | 17,488) | 15,452) | 16,429) | 15,615) | 16,960) | 13,646) | ||||||
| Accounts payable | 42,416) | 37,513) | 37,328) | 32,580) | 27,724) | 26,250) | 22,608) | 22,768) | 21,996) | 18,087) | 17,695) | 19,307) | 18,095) | 15,305) | 15,354) | 16,609) | 19,000) | 16,085) | 15,314) | 14,832) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||
| Payables turnover1 | 2.51 | 2.69 | 2.57 | 2.82 | 3.17 | 3.18 | 3.54 | 3.42 | 3.37 | 3.94 | 3.89 | 3.46 | 3.64 | 4.28 | 4.23 | 3.88 | 3.30 | 3.74 | 3.76 | 3.70 | ||||||
| Benchmarks | ||||||||||||||||||||||||||
| Payables Turnover, Competitors2 | ||||||||||||||||||||||||||
| Accenture PLC | — | 15.64 | 15.73 | 16.19 | 17.60 | 17.37 | 17.43 | 17.38 | 15.94 | 19.31 | 19.54 | 16.93 | 17.41 | 18.03 | 17.35 | 17.54 | 16.37 | 16.93 | 17.22 | 16.45 | ||||||
| Adobe Inc. | — | — | 5.35 | 6.19 | 6.12 | 7.47 | 6.75 | 7.33 | 6.53 | 7.47 | 6.73 | 7.92 | 7.50 | 7.29 | 6.51 | 7.21 | 5.71 | 6.66 | 5.53 | 6.54 | ||||||
| AppLovin Corp. | — | — | 1.01 | 1.03 | 0.89 | 1.55 | 1.62 | 1.72 | 2.07 | 2.62 | 2.88 | 2.80 | 2.85 | 4.11 | 4.57 | 4.37 | 4.60 | 4.40 | 3.90 | 2.83 | ||||||
| Datadog Inc. | — | — | 2.59 | 4.23 | 4.62 | 4.76 | 3.05 | 5.72 | 4.79 | 5.18 | 3.81 | 6.53 | 4.67 | 4.71 | 8.16 | 8.95 | 14.77 | 11.48 | 6.02 | 14.07 | ||||||
| International Business Machines Corp. | — | — | 6.59 | 7.10 | 5.94 | 7.14 | 6.84 | 7.53 | 6.75 | 8.31 | 7.54 | 7.67 | 6.67 | 8.23 | 7.36 | 7.44 | 6.87 | 7.35 | 7.40 | 7.69 | ||||||
| Intuit Inc. | — | 3.83 | 4.24 | 5.83 | 4.86 | 3.73 | 3.48 | 5.41 | 4.81 | 3.83 | 4.19 | 5.12 | 4.93 | 3.29 | 3.54 | 3.98 | 3.26 | 2.52 | 2.31 | 3.47 | ||||||
| Oracle Corp. | 2.10 | 2.23 | 1.89 | 2.18 | 3.31 | 6.65 | 5.89 | 7.00 | 6.42 | 9.02 | 13.12 | 13.67 | 11.27 | 7.60 | 6.68 | 6.72 | 6.74 | 7.65 | 8.03 | 10.79 | ||||||
| Palo Alto Networks Inc. | — | 10.16 | 10.00 | 11.37 | 10.56 | 9.99 | 15.01 | 10.12 | 17.71 | 18.29 | 10.93 | 14.57 | 14.43 | 20.69 | 14.50 | 14.30 | 13.43 | 14.68 | 12.25 | 14.46 | ||||||
| ServiceNow Inc. | — | — | 22.94 | 7.66 | 14.62 | 19.04 | 12.27 | 7.83 | 33.63 | 13.16 | 7.04 | 8.98 | 15.25 | 26.38 | 10.08 | 7.20 | 5.74 | 7.86 | 5.60 | 8.57 | ||||||
| Workday Inc. | 16.35 | 21.83 | 21.88 | 23.01 | 19.16 | 26.89 | 21.90 | 24.24 | 22.71 | 22.24 | 19.76 | 15.27 | 11.16 | 21.79 | 25.95 | 12.14 | 25.74 | 28.20 | 24.24 | 25.48 | ||||||
Based on: 10-K (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-Q (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-K (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30).
1 Q4 2026 Calculation
Payables turnover
= (Cost of revenueQ4 2026
+ Cost of revenueQ3 2026
+ Cost of revenueQ2 2026
+ Cost of revenueQ1 2026)
÷ Accounts payable
= (29,525 + 26,828 + 25,978 + 24,043)
÷ 42,416 = 2.51
2 Click competitor name to see calculations.
The financial data reveals a significant divergence between the growth of operating costs and the growth of liabilities owed to suppliers over the analyzed period. While both cost of revenue and accounts payable increased, the rate of increase in payables outpaced the growth in costs, leading to a progressive decline in the payables turnover ratio.
- Cost of Revenue and Accounts Payable Trends
- Cost of revenue exhibited a steady upward trajectory, increasing from 13,646 million USD in September 2021 to 29,525 million USD by June 2026. Concurrently, accounts payable rose from 14,832 million USD to 42,416 million USD during the same timeframe. The acceleration in accounts payable became particularly pronounced after December 2023, reflecting a substantial increase in the volume of short-term credit utilized from suppliers.
- Payables Turnover Ratio Dynamics
- The payables turnover ratio remained relatively stable, fluctuating between 3.30 and 4.28 from September 2021 through March 2023. However, a sustained downward trend emerged starting in June 2024, where the ratio fell from 3.37 to a period low of 2.51 by June 2026. This indicates a deceleration in the frequency with which supplier obligations are settled.
- Operational Implications
- The declining turnover ratio suggests an expansion of the average payment period. This trend indicates that the company is leveraging its supplier relationships to maintain a larger balance of unpaid obligations relative to its operational costs, effectively increasing its working capital efficiency by delaying cash outflows.
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Working Capital Turnover
Microsoft Corp., working capital turnover calculation (quarterly data)
| Jun 30, 2026 | Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||
| Current assets | 207,710) | 175,329) | 180,190) | 189,066) | 191,131) | 156,644) | 147,080) | 149,926) | 159,734) | 147,180) | 147,393) | 207,586) | 184,257) | 163,889) | 157,823) | 160,812) | 169,684) | 153,922) | 174,188) | 174,326) | ||||||
| Less: Current liabilities | 168,825) | 136,661) | 130,005) | 134,996) | 141,218) | 114,206) | 108,882) | 115,200) | 125,286) | 118,525) | 121,016) | 124,792) | 104,149) | 85,691) | 81,718) | 87,389) | 95,082) | 77,439) | 77,510) | 80,528) | ||||||
| Working capital | 38,885) | 38,668) | 50,185) | 54,070) | 49,913) | 42,438) | 38,198) | 34,726) | 34,448) | 28,655) | 26,377) | 82,794) | 80,108) | 78,198) | 76,105) | 73,423) | 74,602) | 76,483) | 96,678) | 93,798) | ||||||
| Revenue | 90,007) | 82,886) | 81,273) | 77,673) | 76,441) | 70,066) | 69,632) | 65,585) | 64,727) | 61,858) | 62,020) | 56,517) | 56,189) | 52,857) | 52,747) | 50,122) | 51,865) | 49,360) | 51,728) | 45,317) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||
| Working capital turnover1 | 8.53 | 8.23 | 6.09 | 5.43 | 5.64 | 6.36 | 6.85 | 7.32 | 7.12 | 8.26 | 8.63 | 2.64 | 2.65 | 2.65 | 2.68 | 2.77 | 2.66 | 2.52 | 1.91 | 1.88 | ||||||
| Benchmarks | ||||||||||||||||||||||||||
| Working Capital Turnover, Competitors2 | ||||||||||||||||||||||||||
| Accenture PLC | — | 9.97 | 10.23 | 8.66 | 8.15 | 7.92 | 8.22 | 8.28 | 34.49 | 22.48 | 15.40 | 11.18 | 11.93 | 10.11 | 13.40 | 14.81 | 15.07 | 13.41 | 15.55 | 15.85 | ||||||
| Adobe Inc. | — | — | — | — | — | 133.99 | — | 13.02 | 30.25 | 19.54 | 13.19 | 42.33 | 6.85 | 9.10 | 14.68 | 19.89 | 20.28 | 16.36 | 31.92 | 57.86 | ||||||
| AppLovin Corp. | — | — | 1.65 | 1.84 | 1.77 | 2.15 | 2.63 | 5.02 | 3.75 | 3.91 | 4.25 | 4.29 | 4.89 | 6.12 | 2.61 | 2.03 | 2.07 | 2.27 | 2.49 | 1.86 | ||||||
| Cadence Design Systems Inc. | — | — | 4.25 | 5.43 | 1.75 | 1.81 | 1.87 | 1.81 | 1.75 | 1.80 | 6.28 | 8.78 | 10.61 | 7.00 | 8.51 | 7.12 | 9.92 | 8.31 | 5.34 | 4.07 | ||||||
| Datadog Inc. | — | — | 0.96 | 0.93 | 0.90 | 0.91 | 0.92 | 0.88 | 0.88 | 1.26 | 1.33 | 0.96 | 0.98 | 1.02 | 1.03 | 1.06 | 1.06 | 1.02 | 0.95 | 0.85 | ||||||
| International Business Machines Corp. | — | — | — | — | — | — | — | 273.18 | 46.83 | 37.03 | 17.08 | 14.55 | — | — | 31.12 | 12.14 | — | — | — | — | ||||||
| Intuit Inc. | — | 3.76 | 7.04 | 6.70 | 5.04 | 4.22 | 8.78 | 7.87 | 7.45 | 5.15 | 13.92 | 11.94 | 8.13 | 6.30 | 15.31 | 10.83 | 8.98 | 5.68 | 21.87 | 4.39 | ||||||
| Oracle Corp. | 14.02 | 4.53 | — | — | — | 113.15 | — | — | — | — | — | — | — | — | — | — | 3.50 | 3.86 | 3.39 | 1.70 | ||||||
| Palantir Technologies Inc. | — | — | 0.64 | 0.64 | 0.62 | 0.61 | 0.59 | 0.59 | 0.58 | 0.60 | 0.62 | 0.63 | 0.66 | 0.68 | 0.71 | 0.75 | 0.78 | 0.81 | 0.78 | 0.73 | ||||||
| Palo Alto Networks Inc. | — | — | 27.48 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Salesforce Inc. | — | — | 14.11 | 23.11 | 21.69 | 18.14 | 42.35 | 14.56 | 14.27 | 42.02 | 99.31 | 90.67 | 62.21 | 30.85 | 25.15 | 54.57 | 24.95 | 27.10 | — | 4.36 | ||||||
| ServiceNow Inc. | — | — | — | — | 474.21 | 25.49 | 15.46 | 11.33 | 13.25 | 11.50 | 11.73 | 27.96 | 21.77 | 19.04 | 9.59 | 7.83 | 11.16 | 6.63 | 11.21 | 10.61 | ||||||
| Synopsys Inc. | — | 5.62 | 5.27 | 5.60 | 3.08 | 2.99 | 0.43 | 1.53 | 1.60 | 2.35 | 2.82 | 7.85 | 13.12 | 10.27 | 12.83 | 17.05 | 21.34 | 14.02 | 7.78 | 9.47 | ||||||
| Workday Inc. | 4.66 | 2.22 | 1.64 | 1.69 | 1.69 | 1.75 | 1.68 | 1.70 | 1.49 | 1.54 | 1.60 | 1.69 | 1.79 | 1.83 | 1.93 | 2.03 | 35.15 | 11.69 | 24.99 | — | ||||||
Based on: 10-K (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-Q (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-K (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30).
1 Q4 2026 Calculation
Working capital turnover
= (RevenueQ4 2026
+ RevenueQ3 2026
+ RevenueQ2 2026
+ RevenueQ1 2026)
÷ Working capital
= (90,007 + 82,886 + 81,273 + 77,673)
÷ 38,885 = 8.53
2 Click competitor name to see calculations.
The analysis of the financial data indicates a sustained growth trajectory in revenue alongside a significant structural shift in working capital management, resulting in a substantial increase in the working capital turnover ratio over the observed period.
- Revenue Trends
- A consistent upward trend in revenue is observed, rising from 45,317 million USD in September 2021 to 90,007 million USD by June 2026. This growth is characterized by steady quarterly increments, with a notable acceleration beginning in late 2023 and continuing through 2026.
- Working Capital Dynamics
- Working capital remained relatively stable between September 2021 and September 2023, fluctuating between 73,423 million USD and 96,678 million USD. However, a sharp contraction occurred in December 2023, where working capital dropped from 82,794 million USD to 26,377 million USD. Following this decline, a period of gradual recovery was observed, peaking at 54,070 million USD in September 2025, before stabilizing around 38,885 million USD by June 2026.
- Working Capital Turnover Analysis
- The working capital turnover ratio exhibits two distinct phases. From September 2021 to September 2023, the ratio remained low, ranging between 1.88 and 2.77, indicating a higher level of working capital relative to revenue generation. A pivot occurred in December 2023, where the ratio spiked to 8.63 due to the aforementioned collapse in working capital. While the ratio moderated to a low of 5.43 in September 2025 as working capital recovered, it trended upward again to 8.53 by June 2026.
- Operational Efficiency Insights
- The transition from a turnover ratio of approximately 2.0 to a baseline exceeding 5.0 suggests a fundamental change in the efficiency of short-term asset utilization. The significant increase in the ratio indicates that the organization is generating substantially more revenue per dollar of working capital invested, reflecting a leaner operational structure or a strategic reallocation of current assets and liabilities.
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Average Inventory Processing Period
Microsoft Corp., average inventory processing period calculation (quarterly data)
| Jun 30, 2026 | Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||
| Inventory turnover | 76.14 | 82.74 | 90.61 | 81.22 | 93.64 | 98.47 | 88.10 | 47.92 | 59.48 | 54.62 | 42.63 | 22.24 | 26.35 | 22.77 | 21.81 | 15.10 | 16.74 | 18.27 | 19.09 | 16.09 | ||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||||
| Average inventory processing period1 | 5 | 4 | 4 | 4 | 4 | 4 | 4 | 8 | 6 | 7 | 9 | 16 | 14 | 16 | 17 | 24 | 22 | 20 | 19 | 23 | ||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||||
| Average Inventory Processing Period, Competitors2 | ||||||||||||||||||||||||||
| Cadence Design Systems Inc. | — | — | 173 | 151 | 153 | 139 | 112 | 119 | 145 | 201 | 131 | 156 | 152 | 141 | 127 | 117 | 126 | 120 | 115 | 125 | ||||||
| International Business Machines Corp. | — | — | 22 | 19 | 16 | 18 | 17 | 19 | 17 | 18 | 16 | 16 | 15 | 19 | 20 | 21 | 20 | 23 | 22 | 24 | ||||||
| Synopsys Inc. | — | 67 | 70 | 72 | 82 | 104 | 115 | 123 | 106 | 117 | 113 | 115 | 97 | 88 | 82 | 74 | 73 | 79 | 82 | 85 | ||||||
Based on: 10-K (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-Q (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-K (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30).
1 Q4 2026 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 76.14 = 5
2 Click competitor name to see calculations.
A comprehensive analysis of the short-term operating activity reveals a significant and sustained improvement in inventory management efficiency from September 2021 through June 2026. There is a clear inverse correlation between the inventory turnover ratio and the average inventory processing period, with the latter exhibiting a marked downward trend over the observed period.
- Initial Stability and Minor Volatility (September 2021 – September 2023)
- During the first two years, the average inventory processing period remained relatively stable, fluctuating between a high of 24 days in September 2022 and a low of 14 days in June 2023. Inventory turnover ratios in this phase were moderate, ranging from 15.10 to 26.35, indicating a consistent but slower pace of inventory movement.
- Rapid Efficiency Acceleration (December 2023 – June 2024)
- A sharp inflection point occurred starting in December 2023, where the average inventory processing period dropped precipitously from 16 days in the previous quarter to 9 days, and further declined to 6 days by June 2024. This coincided with a substantial surge in the inventory turnover ratio, which climbed from 22.24 in September 2023 to 59.48 in June 2024, signaling a drastic increase in the speed of product throughput.
- High-Efficiency Stabilization (September 2024 – June 2026)
- The final period is characterized by a plateau of high operational efficiency. From September 2024 through March 2026, the average inventory processing period remained nearly constant at 4 days. While a marginal increase to 5 days is noted in June 2026, the inventory turnover ratio remained elevated, peaking at 98.47 in March 2025 and maintaining a baseline above 76.00 through the end of the sequence.
The transition from a processing cycle of approximately 23 days to a stabilized 4-to-5-day cycle represents a profound optimization of short-term asset utilization. This shift suggests a move toward a highly lean inventory model, significantly reducing the duration that capital is tied up in unsold stock.
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Average Receivable Collection Period
Microsoft Corp., average receivable collection period calculation (quarterly data)
| Jun 30, 2026 | Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||
| Receivables turnover | 4.10 | 5.30 | 5.40 | 5.55 | 4.03 | 5.22 | 5.43 | 5.76 | 4.31 | 5.37 | 5.31 | 5.91 | 4.35 | 5.55 | 5.70 | 6.49 | 4.48 | 5.90 | 5.52 | 6.44 | ||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||||
| Average receivable collection period1 | 89 | 69 | 68 | 66 | 91 | 70 | 67 | 63 | 85 | 68 | 69 | 62 | 84 | 66 | 64 | 56 | 81 | 62 | 66 | 57 | ||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||||
| Average Receivable Collection Period, Competitors2 | ||||||||||||||||||||||||||
| Adobe Inc. | — | — | 29 | 31 | 36 | 33 | 28 | 33 | 35 | 31 | 29 | 38 | 42 | 36 | 33 | 37 | 43 | 37 | 35 | 38 | ||||||
| AppLovin Corp. | — | — | 116 | 116 | 121 | 113 | 116 | 120 | 110 | 101 | 99 | 104 | 106 | 102 | 85 | 80 | 91 | 84 | 86 | 89 | ||||||
| Cadence Design Systems Inc. | — | — | 67 | 68 | 65 | 53 | 48 | 43 | 54 | 47 | 50 | 35 | 44 | 40 | 42 | 48 | 50 | 42 | 44 | 42 | ||||||
| Datadog Inc. | — | — | 76 | 68 | 79 | 62 | 73 | 63 | 81 | 70 | 81 | 73 | 87 | 73 | 64 | 75 | 87 | 83 | 82 | 84 | ||||||
| International Business Machines Corp. | — | — | 32 | 34 | 44 | 31 | 34 | 34 | 40 | 31 | 34 | 36 | 43 | 32 | 34 | 35 | 39 | 33 | 36 | 37 | ||||||
| Intuit Inc. | — | 15 | 21 | 11 | 10 | 15 | 22 | 9 | 10 | 18 | 22 | 9 | 10 | 19 | 24 | 11 | 13 | 21 | 28 | 15 | ||||||
| Oracle Corp. | 56 | 61 | 56 | 55 | 54 | 53 | 54 | 54 | 54 | 51 | 48 | 47 | 51 | 47 | 49 | 49 | 51 | 40 | 39 | 40 | ||||||
| Palantir Technologies Inc. | — | — | 88 | 98 | 85 | 94 | 79 | 85 | 73 | 92 | 97 | 76 | 60 | 74 | 67 | 47 | 49 | 68 | 56 | 57 | ||||||
| Palo Alto Networks Inc. | — | 98 | 78 | 51 | 117 | 80 | 64 | 50 | 119 | 80 | 92 | 72 | 130 | 81 | 76 | 78 | 142 | 88 | 72 | 65 | ||||||
| Salesforce Inc. | 126 | 50 | 52 | 41 | 115 | 47 | 54 | 44 | 120 | 52 | 60 | 53 | 125 | 52 | 59 | 52 | 134 | 59 | 63 | 52 | ||||||
| ServiceNow Inc. | — | — | 55 | 45 | 72 | 45 | 51 | 43 | 74 | 46 | 56 | 50 | 83 | 50 | 50 | 53 | 87 | 47 | 47 | 48 | ||||||
| Synopsys Inc. | — | 51 | 53 | 75 | 78 | 79 | 59 | 54 | 56 | 48 | 50 | 65 | 59 | 44 | 54 | 73 | 57 | 50 | 55 | 84 | ||||||
| Workday Inc. | 89 | 69 | 66 | 57 | 84 | 63 | 60 | 55 | 82 | 64 | 69 | 61 | 92 | 64 | 71 | 53 | 88 | 65 | 68 | 53 | ||||||
Based on: 10-K (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-Q (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-K (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30).
1 Q4 2026 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 4.10 = 89
2 Click competitor name to see calculations.
The analysis of receivables management reveals a distinct cyclical pattern characterized by periodic fluctuations in both the receivables turnover ratio and the average receivable collection period. A consistent inverse correlation is maintained throughout the period, where declines in the turnover ratio correspond directly with extensions in the number of days required to collect outstanding receivables.
- Cyclical Performance Patterns
- A recurring seasonal trend is evident, with the average receivable collection period consistently peaking during the June quarter of each year. The collection period reached its highest levels in June 2022 (81 days), June 2023 (84 days), June 2024 (85 days), June 2025 (91 days), and June 2026 (89 days). Conversely, the most efficient collection windows typically occur during the September and December quarters, where the collection period frequently drops toward the 56 to 68-day range.
- Receivables Turnover Volatility
- The receivables turnover ratio exhibits corresponding volatility, fluctuating between a high of 6.49 in September 2022 and a low of 4.03 in June 2025. The ratio consistently troughs during the second quarter of the calendar year, mirroring the peaks in the collection period. This suggests a systemic quarterly variation in credit terms, billing cycles, or customer payment behavior.
- Long-term Efficiency Trajectory
- A gradual upward trend in the duration of the collection cycle is observable over the multi-year period. While the cyclical nature remains constant, the baseline for the collection period has shifted slightly higher. The peak collection duration increased from 81 days in June 2022 to a peak of 91 days in June 2025, indicating a marginal slowing in the velocity of cash inflows from receivables over the long term.
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Operating Cycle
Microsoft Corp., operating cycle calculation (quarterly data)
No. days
| Jun 30, 2026 | Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||
| Average inventory processing period | 5 | 4 | 4 | 4 | 4 | 4 | 4 | 8 | 6 | 7 | 9 | 16 | 14 | 16 | 17 | 24 | 22 | 20 | 19 | 23 | ||||||
| Average receivable collection period | 89 | 69 | 68 | 66 | 91 | 70 | 67 | 63 | 85 | 68 | 69 | 62 | 84 | 66 | 64 | 56 | 81 | 62 | 66 | 57 | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||
| Operating cycle1 | 94 | 73 | 72 | 70 | 95 | 74 | 71 | 71 | 91 | 75 | 78 | 78 | 98 | 82 | 81 | 80 | 103 | 82 | 85 | 80 | ||||||
| Benchmarks | ||||||||||||||||||||||||||
| Operating Cycle, Competitors2 | ||||||||||||||||||||||||||
| Cadence Design Systems Inc. | — | — | 240 | 219 | 218 | 192 | 160 | 162 | 199 | 248 | 181 | 191 | 196 | 181 | 169 | 165 | 176 | 162 | 159 | 167 | ||||||
| International Business Machines Corp. | — | — | 54 | 53 | 60 | 49 | 51 | 53 | 57 | 49 | 50 | 52 | 58 | 51 | 54 | 56 | 59 | 56 | 58 | 61 | ||||||
| Synopsys Inc. | — | 118 | 123 | 147 | 160 | 183 | 174 | 177 | 162 | 165 | 163 | 180 | 156 | 132 | 136 | 147 | 130 | 129 | 137 | 169 | ||||||
Based on: 10-K (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-Q (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-K (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30).
1 Q4 2026 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 5 + 89 = 94
2 Click competitor name to see calculations.
The operating cycle exhibits a pattern of seasonal fluctuation characterized by a significant divergence between inventory management efficiency and receivables collection timing. While the overall cycle length remains sensitive to periodic spikes, there is a clear long-term reduction in the time required to process inventory.
- Average Inventory Processing Period
- A pronounced downward trend is observed in the inventory processing period. From September 2021 through December 2023, the period fluctuated between 9 and 24 days. However, starting in December 2023, a substantial improvement in efficiency occurred, with the period dropping to single digits. Between December 2024 and March 2026, the period stabilized at a consistent 4 days, indicating a near-immediate turnover of inventory.
- Average Receivable Collection Period
- The receivable collection period demonstrates significant cyclical volatility rather than a linear trend. A recurring pattern of peaks is evident every June, with collection periods reaching 81, 84, 85, 91, and 89 days across successive years. Conversely, troughs typically occur in the September quarters, often returning to the mid-60s. This suggests a seasonal lag in payment collections coinciding with the end of the fiscal year.
- Operating Cycle
- The total operating cycle is primarily driven by the receivable collection period, as the inventory component has become a negligible factor in recent periods. The cycle length oscillates between approximately 70 and 103 days. Although the peaks remain high due to the aforementioned collection delays, the baseline of the cycle has shifted lower; the minimum cycle length decreased from 78 days in September 2023 to 70 days in September 2025. The overall compression of the operating cycle is directly attributable to the optimization of inventory turnover.
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Average Payables Payment Period
Microsoft Corp., average payables payment period calculation (quarterly data)
| Jun 30, 2026 | Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||
| Payables turnover | 2.51 | 2.69 | 2.57 | 2.82 | 3.17 | 3.18 | 3.54 | 3.42 | 3.37 | 3.94 | 3.89 | 3.46 | 3.64 | 4.28 | 4.23 | 3.88 | 3.30 | 3.74 | 3.76 | 3.70 | ||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||||
| Average payables payment period1 | 146 | 136 | 142 | 130 | 115 | 115 | 103 | 107 | 108 | 93 | 94 | 106 | 100 | 85 | 86 | 94 | 111 | 98 | 97 | 99 | ||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||||
| Average Payables Payment Period, Competitors2 | ||||||||||||||||||||||||||
| Accenture PLC | — | 23 | 23 | 23 | 21 | 21 | 21 | 21 | 23 | 19 | 19 | 22 | 21 | 20 | 21 | 21 | 22 | 22 | 21 | 22 | ||||||
| Adobe Inc. | — | — | 68 | 59 | 60 | 49 | 54 | 50 | 56 | 49 | 54 | 46 | 49 | 50 | 56 | 51 | 64 | 55 | 66 | 56 | ||||||
| AppLovin Corp. | — | — | 361 | 355 | 410 | 235 | 225 | 212 | 176 | 139 | 127 | 130 | 128 | 89 | 80 | 84 | 79 | 83 | 94 | 129 | ||||||
| Datadog Inc. | — | — | 141 | 86 | 79 | 77 | 120 | 64 | 76 | 71 | 96 | 56 | 78 | 78 | 45 | 41 | 25 | 32 | 61 | 26 | ||||||
| International Business Machines Corp. | — | — | 55 | 51 | 61 | 51 | 53 | 48 | 54 | 44 | 48 | 48 | 55 | 44 | 50 | 49 | 53 | 50 | 49 | 47 | ||||||
| Intuit Inc. | — | 95 | 86 | 63 | 75 | 98 | 105 | 67 | 76 | 95 | 87 | 71 | 74 | 111 | 103 | 92 | 112 | 145 | 158 | 105 | ||||||
| Oracle Corp. | 174 | 164 | 193 | 167 | 110 | 55 | 62 | 52 | 57 | 40 | 28 | 27 | 32 | 48 | 55 | 54 | 54 | 48 | 45 | 34 | ||||||
| Palo Alto Networks Inc. | — | 36 | 36 | 32 | 35 | 37 | 24 | 36 | 21 | 20 | 33 | 25 | 25 | 18 | 25 | 26 | 27 | 25 | 30 | 25 | ||||||
| ServiceNow Inc. | — | — | 16 | 48 | 25 | 19 | 30 | 47 | 11 | 28 | 52 | 41 | 24 | 14 | 36 | 51 | 64 | 46 | 65 | 43 | ||||||
| Workday Inc. | 22 | 17 | 17 | 16 | 19 | 14 | 17 | 15 | 16 | 16 | 18 | 24 | 33 | 17 | 14 | 30 | 14 | 13 | 15 | 14 | ||||||
Based on: 10-K (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-Q (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-K (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30).
1 Q4 2026 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 2.51 = 146
2 Click competitor name to see calculations.
The analysis of short-term operating activity reveals a significant transition in the management of accounts payable, moving from a period of relative stability to a marked extension of the payment cycle.
- Payables Turnover Trends
- The payables turnover ratio exhibited moderate fluctuations between 3.30 and 4.28 from September 2021 through December 2024. However, a consistent downward trajectory began in March 2025, with the ratio declining from 3.18 to a period low of 2.51 by June 2026. This downward trend indicates a decrease in the frequency with which the entity settles its average accounts payable balance over the given timeframe.
- Average Payables Payment Period Analysis
- The average time required to settle obligations to suppliers remained largely within the 85 to 111-day range between September 2021 and December 2024. A structural shift is observable starting in March 2025, where the payment period rose to 115 days and continued to climb significantly. This period peaked at 146 days by June 2026, representing a substantial increase in the duration of the payables cycle compared to the 2021-2023 baseline.
- Operational Implications
- The inverse relationship between the turnover ratio and the payment period is strictly maintained throughout the data set. The extension of the payment period from approximately 99 days in late 2021 to 146 days by mid-2026 suggests an intentional expansion of the cash conversion cycle. This trend reflects a strategic retention of cash within the organization, potentially indicating increased leverage over suppliers or a shift in short-term liquidity management strategies.
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Cash Conversion Cycle
Microsoft Corp., cash conversion cycle calculation (quarterly data)
No. days
| Jun 30, 2026 | Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||
| Average inventory processing period | 5 | 4 | 4 | 4 | 4 | 4 | 4 | 8 | 6 | 7 | 9 | 16 | 14 | 16 | 17 | 24 | 22 | 20 | 19 | 23 | ||||||
| Average receivable collection period | 89 | 69 | 68 | 66 | 91 | 70 | 67 | 63 | 85 | 68 | 69 | 62 | 84 | 66 | 64 | 56 | 81 | 62 | 66 | 57 | ||||||
| Average payables payment period | 146 | 136 | 142 | 130 | 115 | 115 | 103 | 107 | 108 | 93 | 94 | 106 | 100 | 85 | 86 | 94 | 111 | 98 | 97 | 99 | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||
| Cash conversion cycle1 | -52 | -63 | -70 | -60 | -20 | -41 | -32 | -36 | -17 | -18 | -16 | -28 | -2 | -3 | -5 | -14 | -8 | -16 | -12 | -19 | ||||||
| Benchmarks | ||||||||||||||||||||||||||
| Cash Conversion Cycle, Competitors2 | ||||||||||||||||||||||||||
| International Business Machines Corp. | — | — | -1 | 2 | -1 | -2 | -2 | 5 | 3 | 5 | 2 | 4 | 3 | 7 | 4 | 7 | 6 | 6 | 9 | 14 | ||||||
Based on: 10-K (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-Q (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-K (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30).
1 Q4 2026 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 5 + 89 – 146 = -52
2 Click competitor name to see calculations.
The operational efficiency of the cash conversion cycle exhibits a consistent trend toward a more negative position, indicating an increasing ability to generate cash from sales before payment is due to suppliers.
- Average Inventory Processing Period
- A significant downward trend is observed in inventory management. The processing period decreased from 23 days in September 2021 to a stable range of 4 to 5 days by 2025 and 2026. This contraction suggests a substantial improvement in inventory turnover and a reduction in the capital tied up in physical goods.
- Average Receivable Collection Period
- The collection period displays notable cyclical volatility rather than a linear trend. Frequent peaks are observed every June, with the period reaching as high as 91 days in June 2025, followed by sharp decreases in September. This pattern suggests seasonal fluctuations in customer payment behavior or specific quarterly billing cycles.
- Average Payables Payment Period
- There is a clear and sustained increase in the time taken to settle obligations with suppliers. Starting at 99 days in September 2021, the period expanded to 146 days by June 2026. This extension of payment terms effectively serves as a source of interest-free financing, contributing significantly to the negative cash conversion cycle.
- Cash Conversion Cycle (CCC)
- The CCC remained consistently negative throughout the period, though its magnitude fluctuated. After a period of narrowing between March 2023 and June 2023 (reaching a high of -2 days), the cycle accelerated downward, reaching its most negative point of -70 days in December 2025. This deepening negative cycle is primarily driven by the simultaneous reduction in inventory hold times and the strategic extension of accounts payable.
The combined effect of these trends indicates a highly efficient short-term operating cycle where the company leverages supplier credit to fund its operations and inventory requirements, thereby optimizing liquidity.
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