Microchip Technology Inc (MCHP)

Inventory turnover

		Mar 31, 2025	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021
Cost of revenue	US$ in thousands	1,933,700	2,638,700	2,740,800	2,371,300	2,059,600
Inventory	US$ in thousands	1,293,500	1,316,000	1,324,900	854,400	665,000
Inventory turnover		1.49	2.01	2.07	2.78	3.10

March 31, 2025 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $1,933,700K ÷ $1,293,500K
= 1.49

Microchip Technology Inc's inventory turnover has shown a downward trend over the past five years, declining from 3.10 in March 31, 2021, to 1.49 in March 31, 2025. A decreasing inventory turnover ratio may indicate that the company is holding onto its inventory for a longer period, which could potentially lead to higher carrying costs and obsolescence risks. This trend suggests that Microchip Technology Inc may need to reassess its inventory management strategies to improve efficiency and optimize its working capital. Investors and stakeholders should monitor this ratio closely as it provides insights into the company's inventory management effectiveness.