Microchip Technology Inc (MCHP)

Payables turnover

		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
Cost of revenue (ttm)	US$ in thousands	2,638,700	2,816,200	2,868,900	2,817,300	2,740,800	2,651,200	2,557,000	2,463,200	2,371,300	2,287,800	2,189,900	2,110,000	2,059,600	2,031,800	2,027,400	2,036,100	2,032,100	2,029,000	2,122,200	2,355,100
Payables	US$ in thousands	213,000	242,200	283,500	281,300	396,900	354,800	379,800	304,700	344,700	301,300	302,600	284,400	292,400	259,800	216,900	211,100	246,800	209,300	235,600	245,700
Payables turnover		12.39	11.63	10.12	10.02	6.91	7.47	6.73	8.08	6.88	7.59	7.24	7.42	7.04	7.82	9.35	9.65	8.23	9.69	9.01	9.59

March 31, 2024 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $2,638,700K ÷ $213,000K
= 12.39

The payables turnover ratio for Microchip Technology Inc has shown fluctuations over the past few quarters. The ratio measures how efficiently the company is managing its accounts payables by assessing how many times the company pays off its suppliers within a given period.

In the latest quarter, as of March 31, 2024, the payables turnover ratio was 12.39, indicating that Microchip Technology Inc paid off its accounts payables approximately 12.39 times during the quarter. This represents an improvement compared to the previous quarter's ratio of 11.63 as of December 31, 2023.

Looking at the trend over the past year, there was variability in the payables turnover ratio, with some quarters showing higher turnover rates than others. For example, the ratio was relatively low at 6.91 as of March 31, 2023, but improved to 10.02 as of September 30, 2023.

Overall, a higher payables turnover ratio suggests that the company is managing its payables efficiently, possibly negotiating favorable credit terms with suppliers or making timely payments. On the other hand, a lower ratio may indicate that the company is taking longer to pay its suppliers, potentially signaling liquidity issues or challenges in managing cash flow.

It is essential for analysts and investors to monitor the payables turnover ratio over time to assess the company's liquidity, operational efficiency, and relationships with suppliers.