Microchip Technology Inc (MCHP)

Days of sales outstanding (DSO)

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	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
Receivables turnover		5.55	5.26	6.01	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
DSO	days	65.77	69.35	60.72	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

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.55
= 65.77

Days of Sales Outstanding (DSO) is a crucial metric that indicates the average number of days a company takes to collect revenue after making a sale. For Microchip Technology Inc, the trend in DSO over the past few quarters has shown some fluctuations.

From March 31, 2020, to December 31, 2022, the DSO figures ranged between 52.68 and 66.96 days, with some variability but generally staying within a relatively stable range. However, starting from March 31, 2023, there was a noticeable decrease in DSO to 54.68 days, followed by further improvements in subsequent quarters.

Notably, by September 30, 2024, the DSO had increased to 69.35 days, which could indicate a potential delay in the collection of receivables during that period. It's important for the company to closely monitor its DSO and work towards optimizing its accounts receivable processes to ensure timely collections and maintain healthy cash flows.

Overall, while there have been fluctuations in Microchip Technology Inc's DSO, the recent improvements suggest an effort to manage receivables more efficiently. Monitoring DSO trends is essential in evaluating the company's credit and collection policies and assessing its overall financial health.