Question: the following table contains current assets and current liability balances for Microsoft Corporation (MSFT): 2016 2015 2014 Cash and cash equivalents 10,339,000 6,111,000 6,714,000 Short
the following table contains current assets and current liability balances for Microsoft Corporation (MSFT):
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| 2016 | 2015 | 2014 |
| Cash and cash equivalents | 10,339,000 | 6,111,000 | 6,714,000 |
| Short term investments | 13,323,000 | 17,300,000 | 27,447,000 |
| Net receivables | 15,606,000 | 13,237,000 | 11,256,000 |
| Inventory | 985,000 | 1,127,000 | 1,478,000 |
| Other current assets | 2,989,000 | 2,393,000 | 2,115,000 |
| Total current assets | 43,242,000 | 40,168,000 | 49,010,000 |
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| Accounts payable | 12,830,000 | 6,612,000 | 9,521,000 |
| Short/current long-term debt | 0 | 2,741,000 | 0 |
| Other current liabilities | 17,056,000 | 14,401,000 | 12,921,000 |
| Total current liabilities | 29,886,000 | 23,754,000 | 22,442,000 |
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Have there been changes in Microsofts liquidity over the past 3 years shown? If so, have the changes been to improve the firms liquidity? Explain your observations. Calculate the firms working capital for the 3 years. What is the tradeoff in managing the firms working capital? Is it possible for a firm to have a negative working capital measurement? Under what conditions can this happen? Is this always a cause for concern? If so, when is it dangerous?
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