Microchip Technology Inc (MCHP)

Activity ratios

Short-term

Turnover ratios

	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
Inventory turnover	1.47	1.63	1.84	2.01	2.15	2.16	2.11	2.07	2.27	2.48	2.70	2.78	2.98	3.07	3.09	3.10	3.05	3.07	3.10	2.96
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
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
Working capital turnover	2.86	—	4.61	15.47	—	78.60	175.27	—	6.58	55.51	6.23	6.47	6.56	5.88	5.34	—	—	35.62	—	9.10

The inventory turnover ratio for Microchip Technology Inc has been relatively stable over the years, ranging from 1.47 to 3.10. This indicates that the company is efficiently managing its inventory by selling and replacing it within a reasonable time frame.

The receivables turnover ratio has shown some fluctuations over the years, varying from 5.24 to 6.93. A higher receivables turnover ratio suggests that the company is efficient in collecting payments from its customers.

On the other hand, the payables turnover ratio has been steadily increasing from 7.82 to 12.39. This indicates that the company is taking a longer time to pay its suppliers, which may suggest a more favorable position in terms of managing its payables.

The working capital turnover ratio for Microchip Technology Inc has shown significant variability, ranging from NaN to 175.27. A high working capital turnover ratio implies that the company is effectively utilizing its working capital to generate sales.

Overall, analyzing the activity ratios of Microchip Technology Inc suggests that the company is efficiently managing its inventory, receivables, payables, and working capital to support its operations and financial performance.

Average number of days

		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
Days of inventory on hand (DOH)	days	247.50	224.16	197.86	182.04	169.93	169.33	173.14	176.44	160.44	147.07	135.11	131.51	122.56	118.94	118.29	117.85	119.66	119.07	117.81	123.16
Days of sales outstanding (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
Number of days of payables	days	35.75	34.17	29.71	29.46	31.39	36.07	36.44	52.86	48.85	54.21	45.15	53.06	48.07	50.44	49.20	51.82	46.67	39.05	37.84	44.33

Microchip Technology Inc's Days of Inventory on Hand (DOH) have shown an increasing trend over the analyzed periods, indicating that the company is holding inventory for longer periods. This could potentially indicate inefficiencies in inventory management or changes in production cycles.

In terms of Days of Sales Outstanding (DSO), Microchip Technology Inc has experienced fluctuations over time. The DSO measure reflects the average number of days it takes for the company to collect revenue after making a sale. A decreasing trend in DSO can signify improvements in collections efficiency and cash flow management.

The Number of Days of Payables for Microchip Technology Inc has also varied throughout the periods analyzed. A higher number of days of payables indicates that the company is taking longer to pay its suppliers, which could be advantageous for managing cash flows but potentially strain supplier relationships if payment terms become too extended.

Overall, a thorough analysis of these activity ratios can provide insights into Microchip Technology Inc's operational efficiency, cash flow management, and relationships with suppliers and customers. Monitoring these ratios over time is essential for evaluating the company's performance and identifying areas for improvement.

Long-term

	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
Fixed asset turnover	4.13	4.69	5.51	6.39	7.07	7.41	7.39	7.16	7.23	7.02	7.25	7.05	6.93	6.54	6.39	6.36	6.40	6.37	6.23	6.02
Total asset turnover	0.30	0.35	0.42	0.48	0.53	0.54	0.53	0.52	0.50	0.47	0.45	0.42	0.40	0.37	0.35	0.33	0.32	0.31	0.31	0.30

Long-term activity ratios provide insights into how efficiently a company manages its assets over an extended period.

1. Fixed Asset Turnover: Microchip Technology Inc's fixed asset turnover ratio has shown a generally increasing trend from March 31, 2020, to June 30, 2023, peaking at 7.41 on September 30, 2023. However, there was a slight decrease in the ratio by the end of December 31, 2023. Notably, the ratio dropped significantly to 4.13 by the end of December 31, 2024, after which it gradually increased to 7.07 by December 31, 2024.

2. Total Asset Turnover: The total asset turnover ratio, on the other hand, increased steadily over the period from March 31, 2020, to December 31, 2023, reaching its peak of 0.54 on September 30, 2023. However, there was a slight decline in the ratio by the end of December 31, 2023. The ratio then dropped from 0.53 on March 31, 2024, to 0.30 by the end of December 31, 2024.

In summary, the fixed asset turnover ratio showed fluctuations but generally demonstrated an upward trend, while the total asset turnover ratio displayed a more stable increase before declining towards the end of the period under review. These ratios suggest that Microchip Technology Inc effectively utilized its fixed assets over time, although there were fluctuations in the efficiency of its total assets turnover in the latter periods.