Refering to the Microsoft Corporation 2021 annual report, the opening inventory of 2021 is $1,895 million; while the closing inventory is $2,636 million; with the cost of goods sold at $52,232 million. Using these information, we will be able to calculate the inventory days.

Inventory days = (average inventory / cost of goods sold) * 365 days

= ([($1,895 + $2,636) million / 2] / $52,232 million) * 365 days

= 15.83 days

= 16 days

Therefore, the inventory days of Microsoft Corporation would be 16 days.

Inventory Turnover

The information needed to calcualte inventory turnover is similar to inventory days. with the opening inventory of 2021 $1,895 million; closing inventory of $2,636 million; and the cost of goods sold at $52,232 million.

Inventory turnover = cost of goods sold / average inventory

= $52,232 / [($1,895 + $2,636) million / 2]

= 23.06

Therefore, the inventory turnover for Microsoft Corporation would be 23.06.

Receivables Collection Period

Refering to the Microsoft Coorporation's annual report, the accounts receivable is $38,043 million; while the credit sales is $168,088 million. With these information we would be able to calculate the receivables collection period.

Receivables collection period = (receivables / credit sales) * 365 days

= ($38,043 / $168,088) million * 365 days

= 82.61 days

= 83 days

Therefore, the receivable collection period for Microsoft Corporation would be 83 days.

Payables Payment Period

Referring to the Microsoft Corporation annual report, the accounts payable is $15,163 million; while the cost of goods sold is $52,232 million. Using these information, we will be able to calculate the payables payment period.

Payables payment period = (payables / cost of goods sold) * 365 days

= ($15,163 / $52,232) million * 365 days

= 105.96 days

= 106 days

Therefore, the payables payment period for Microsoft Corporation is 106 days.

Asset Turnover

Referring to the Microsoft Corporation annual report, the total revenue is $168,088 million; while the average total assets is ($301,311 + $333,779) million / 2, which is $317,545 million. With these information, we would be able to calculate the asset turnover.

Asset turnover = total revenue / total average assets

= $168,088 / [($301,311 + $333,779) / 2]

= 0.53

Therefore, the asset turnover for Microsoft Corporation would be 0.53.

Debt - to - asset

Using Microsoft Corporation's annual report, we can find out that the total debt is $50,074 million; while the total assets is $333,779 million. With these information we would be able to calculate the debt - to - asset.

Debt - to - asset = total debt / total asset

= $50,074 million / $333,779 million

= 0.15

Therefore, the debt - to - asset for Microsoft Corporation is 0.15.

Current Ratio

Referring to Microsoft Corporation's annual report, the current assets is $130,334 million; while current liabilities is $88,657 million. With these information we would be able to calculate the current ratio.

Current ratio = current assets / current liabilities

= $130,334 million / $88,657 million

= 1.47

Therefore, the current ratio for Microsoft Corporation is 1.47.

Liquid Ratio / Acid Test

Referring to Microsoft Corporation's annual report, the current assets is $130,334 million; while the inventory is $2,636 million; and the current liability is $88,657 million.

Liquid ratio / acid test = (current assets - inventory) / current liability

= ($130,334 - $2,636) million / $88,657

= 1.44 Suggest the suitable working capital funding policy for the selected company. Consequently, explain the pros and cons of the policy

Answer rating: 100% (QA)

Answer The suitable working capital funding policy for Microsoft Corporation would depend on various factors such as its business model industry dynam... View the full answer