Microchip Technology Inc (MCHP)

Days of sales outstanding (DSO)

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Receivables turnover		6.68	6.46	6.36	5.45	5.65
DSO	days	54.68	56.46	57.40	66.96	64.64

March 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.68
= 54.68

Days Sales Outstanding (DSO) is a measure of how long it takes for a company to collect its accounts receivable. A lower DSO indicates that the company is collecting payments more quickly, which is generally favorable.

Looking at the trend for Microchip Technology Inc over the past five years, we observe a slight improvement in DSO from 66.96 days in 2021 to 54.68 days in 2024. This indicates that the company has been able to collect its accounts receivable more efficiently over the years.

A decreasing DSO can suggest that Microchip Technology Inc is managing its accounts receivable effectively, potentially indicating stronger cash flow and working capital management. It may also imply strong customer relationships and timely payment collection processes.

Overall, the decreasing trend in DSO for Microchip Technology Inc is a positive indicator of efficient accounts receivable management, but further analysis and comparison with industry peers would provide a more comprehensive understanding of the company's performance in this area.