Microchip Technology Inc (MCHP)

Payables turnover

		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
Cost of revenue (ttm)	US$ in thousands	2,000,200	2,181,300	2,412,900	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
Payables	US$ in thousands	195,900	204,200	196,400	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
Payables turnover		10.21	10.68	12.29	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

December 31, 2024 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $2,000,200K ÷ $195,900K
= 10.21

The payables turnover ratio of Microchip Technology Inc has shown fluctuations over the reported periods. The ratio decreased from 8.23 in March 2020 to 6.73 in September 2022, indicating that the company took longer to pay its suppliers during this period. However, the ratio improved to 12.39 by March 2024, suggesting that the company was able to settle its payables more frequently.

A high payables turnover ratio generally indicates that the company is efficiently managing its accounts payable by paying off its suppliers quickly. On the other hand, a low payables turnover ratio may signify that the company is not effectively managing its payables or may be facing liquidity issues.

It is important for stakeholders to monitor the payables turnover ratio of Microchip Technology Inc over time to assess the company's financial health and its ability to meet its short-term obligations. Additionally, analyzing trends in the payables turnover ratio can provide insights into the company's cash flow management and relationships with its suppliers.