MSFTBULLISH

MSFT Current Ratio Analysis

1.28x

Higher than 30% of Technology sector peers

Updated 936h ago·SEC filings & market data

Key Takeaway

Microsoft's current ratio of 1.28x measures its ability to pay short-term obligations with short-term assets; a ratio above 1.0x indicates it holds more current assets than liabilities.

Sector Performance

30th percentile

MSFT

1.28x

Sector Median

1.96x

Sector Avg

10.67x

Prior Period

1.39x(Apr 2026)

↓ Declining

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Deep Analysis

Microsoft's current ratio of 1.28x measures its ability to pay short-term obligations with short-term assets; a ratio above 1.0x indicates it holds more current assets than liabilities.

This places Microsoft well below the technology sector median of 1.84x, at the 30th percentile among peers. While the year-over-year change is not available, the ratio declined 7.9% quarter-over-quarter from 1.39x to 1.28x. The low level relative to the sector, combined with a recent drop, suggests increased liquidity risk if the trend continues, though the absolute ratio above 1x still provides a basic safety cushion. This metric contradicts the overall BULLISH verdict, as a weak and declining current ratio points to reduced financial flexibility relative to peers.

Frequently Asked Questions

What does the Current Ratio tell investors about MSFT?

Measures short-term financial health. A ratio above 1.5 is generally healthy; below 1.0 may indicate liquidity stress.

How is the Current Ratio calculated?

Current Ratio is calculated as: Current Assets / Current Liabilities.

How does MSFT's Current Ratio compare to its sector?

MSFT's Current Ratio of 1.28x compares to a Technology sector median of 1.96x, placing it in the 30th percentile.

Who are MSFT's closest peers by Current Ratio?

The closest Technology peers by Current Ratio include: ORCL (1.12x), PCTY (1.08x), UBER (1.07x), SAP (1.07x), AAPL (1.07x).

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Learn More About Current Ratio

Why Working Capital Management Matters More Than You Think

Working capital is more than current assets minus liabilities. Learn why working capital matters for liquidity, efficiency, and competitive advantage, with real data from AMZN, COST, HD, and XOM.

The Formula

Current Assets / Current Liabilities

Why It Matters

Measures short-term financial health. A ratio above 1.5 is generally healthy; below 1.0 may indicate liquidity stress.