Switch to:
Microsoft Corp  (NAS:MSFT) Inventory Turnover: 4.07 (As of Jun. 2017)

Inventory turnover measures how fast the company turns over its inventory within a year. It is calculated as Cost of Goods Sold divided by Total Inventories. Microsoft Corp's Cost of Goods Sold for the three months ended in Jun. 2017 was \$8,456 Mil. Microsoft Corp's Total Inventories for the quarter that ended in Jun. 2017 was \$2,080 Mil. Microsoft Corp's inventory turnover for the quarter that ended in Jun. 2017 was 4.07.

Days Inventory indicates the number of days of goods in sales that a company has in the inventory. Microsoft Corp's Days Inventory for the three months ended in Jun. 2017 was 22.45.

Total Inventories can be measured by Days Sales of Inventory (DSI). Microsoft Corp's days sales of inventory (DSI) for the three months ended in Jun. 2017 was 8.14.

Inventory-to-Revenue determines the ability of a company to manage their inventory levels. It measures the percentage of Inventories the company currently has on hand to support the current amount of Revenue. Microsoft Corp's Inventory-to-Revenue for the quarter that ended in Jun. 2017 was 0.09.

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Microsoft Corp Annual Data

 Jun08 Jun09 Jun10 Jun11 Jun12 Jun13 Jun14 Jun15 Jun16 Jun17 Inventory Turnover 13.26 11.78 11.88 12.72 15.46

Microsoft Corp Quarterly Data

 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Inventory Turnover 3.39 2.92 3.90 4.09 4.07

Calculation

Microsoft Corp's Inventory Turnover for the fiscal year that ended in Jun. 2017 is calculated as

 Inventory Turnover (A: Jun. 2017 ) = Cost of Goods Sold / Total Inventories = Cost of Goods Sold (A: Jun. 2017 ) / ( (Total Inventories (A: Jun. 2016 ) + Total Inventories (A: Jun. 2017 )) / 2 ) = 34261 / ( (2251 + 2181) / 2 ) = 34261 / 2216 = 15.46

Microsoft Corp's Inventory Turnover for the quarter that ended in Jun. 2017 is calculated as

 Inventory Turnover (Q: Jun. 2017 ) = Cost of Goods Sold / Total Inventories = Cost of Goods Sold (Q: Jun. 2017 ) / ( (Total Inventories (Q: Mar. 2017 ) + Total Inventories (Q: Jun. 2017 )) / 2 ) = 8456 / ( (1979 + 2181) / 2 ) = 8456 / 2080 = 4.07

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Explanation

Inventory Turnover measures how fast the company turns over its inventory within a year. A higher inventory turnover means the company has light inventory. Therefore the company spends less money on storage, write downs, and obsolete inventory. If the inventory is too light, it may affect sales because the company may not have enough to meet demand.

1. Days Inventory indicates the number of days of goods in sales that a company has in the inventory.

Microsoft Corp's Days Inventory for the three months ended in Jun. 2017 is calculated as:

 Days Inventory = Total Inventories (Q: Jun. 2017 ) / Cost of Goods Sold (Q: Jun. 2017 ) * Days in Period = 2080 / 8456 * 365 / 4 = 22.45

2. Total Inventories can be measured by Days Sales of Inventory (DSI).

Microsoft Corp's Days Sales of Inventory for the three months ended in Jun. 2017 is calculated as:

 Days Sales of Inventory (DSI) = Total Inventories (Q: Jun. 2017 ) / Revenue (Q: Jun. 2017 ) * Days in Period = 2080 / 23317 * 365 / 4 = 8.14

3. Inventory-to-Revenue determines the ability of a company to manage their inventory levels. It measures the percentage of Inventories the company currently has on hand to support the current amount of Revenue.

Microsoft Corp's Inventory to Revenue for the quarter that ended in Jun. 2017 is calculated as

 Inventory-to-Revenue = Total Inventories (Q: Jun. 2017 ) / Revenue (Q: Jun. 2017 ) = 2080 / 23317 = 0.09

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Be Aware

Usually retailers pile up their inventories at holiday seasons to meet the stronger demand. Therefore, the inventory of a particular quarter of a year should not be used to calculate inventory turnover. An average inventory is a better indication.

Related Terms

From GuruFocus

Microsoft proposes election of new board members

By PRNewswire about MSFT 2017-10-16 16:00:38

Symantec powers consumer security with the Microsoft Cloud

By PRNewswire about MSFT 2017-10-16 08:30:50

From the Internet

5 Things You Didn't Know About Apple Inc.

- Fool 2017-10-16 22:01:00

Why AMD Can Win Big With the Ataribox

- Fool 2017-10-16 21:08:00

Microsoft adding Marriott CEO, former Commerce Secretary to board

- cnbc 2017-10-16 17:48:23

Microsoft CEO gets \$20 million in total compensation

- MarketWatch 2017-10-16 17:03:00

Months after Cisco bought AppDynamics for \$3.7 billion, its founder is building a new start-up

- cnbc 2017-10-16 16:58:44

1 Reason to Buy AMD Stock, and 1 Reason to Avoid It

- Fool 2017-10-16 16:33:00

Alibaba Vs Amazon Cloud Wars

- Seekingalpha 2017-10-16 15:10:55

5 Things to Watch as IBM Reports Earnings

- theStreet 2017-10-16 15:07:00

The moment of truth for U.S. stocks will take place in the next two weeks

- MarketWatch 2017-10-16 14:41:00

How Google can close the gap with Amazon and Microsoft in the cloud

- Barron's 2017-10-16 14:07:19

Nokia Growth Partners Leads Investment Securityscorecard

- Seekingalpha 2017-10-16 12:08:19

Apple Slapped With \$440 Million Fine in VirnetX Patent Battle

- theStreet 2017-10-16 11:15:00

These stocks have popped more than 75% since Trump was elected

- MarketWatch 2017-10-16 10:58:00

Supreme Court to Hear Microsoft Email Battle, American Express Antitrust Cases

- theStreet 2017-10-16 10:52:00

Three Components to Drive Proofpoint's (PFPT) Q3 Earnings

- Zacks 2017-10-16 09:29:00

IBM to Speed Up Global Payments with New Blockchain Solution

- Zacks 2017-10-16 09:23:00

Microsoft, Amazon Team Up to Launch Gluon Deep Learning API

- Zacks 2017-10-16 08:10:00

Tired of the office? Microsoft builds treehouses for its employees

- MarketWatch 2017-10-15 21:58:00

Top 5 Dividend Growth Stocks Tech

- Seekingalpha 2017-10-15 21:16:17

Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to \$400 per referral. ( Learn More)