Microchip Technology Inc (MCHP)

Days of sales outstanding (DSO)

		Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019
Receivables turnover		6.68	6.11	5.24	5.98	6.46	6.85	6.74	6.30	6.36	6.93	6.13	5.69	5.45	5.93	5.79	5.88	5.65	6.54	6.32	5.83
DSO	days	54.68	59.75	69.62	61.02	56.46	53.28	54.15	57.92	57.40	52.68	59.58	64.10	66.96	61.58	63.03	62.04	64.64	55.85	57.73	62.63

March 31, 2024 calculation

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

Days of Sales Outstanding (DSO) is a key efficiency ratio that indicates how long it takes for a company to collect its accounts receivables. A lower DSO is generally preferred as it suggests faster cash conversion and efficient management of receivables.

Analyzing the DSO trend for Microchip Technology Inc over the past eight quarters reveals fluctuations in the collection period. The DSO has ranged from a low of 52.68 days to a high of 69.62 days during this period.

In the most recent quarter, ending March 31, 2024, the DSO stood at 54.68 days, showing a slight improvement from the previous quarter. This suggests that Microchip Technology Inc was able to collect its accounts receivables more efficiently in the latest period.

However, it is important to note that the DSO has shown some volatility over the quarters, indicating potential challenges in managing accounts receivables consistently. The company should focus on maintaining a stable and decreasing trend in DSO to ensure timely collection of receivables and improve liquidity.

Overall, the analysis of DSO for Microchip Technology Inc highlights the importance of effective accounts receivable management in optimizing cash flow and working capital efficiency.