Microchip Technology Inc (MCHP)

Total asset turnover

		Mar 31, 2025	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021
Revenue	US$ in thousands	4,401,600	7,634,400	8,438,700	6,820,900	5,438,400
Total assets	US$ in thousands	15,374,600	15,873,200	16,370,300	16,199,500	16,478,800
Total asset turnover		0.29	0.48	0.52	0.42	0.33

March 31, 2025 calculation

Total asset turnover = Revenue ÷ Total assets
= $4,401,600K ÷ $15,374,600K
= 0.29

The total asset turnover ratio indicates how efficiently a company is utilizing its assets to generate revenue. In the case of Microchip Technology Inc, we observe fluctuations in the total asset turnover ratio over the past five years.

In March 31, 2021, the total asset turnover ratio was 0.33, implying that the company generated $0.33 in revenue for every $1 of assets it held. This ratio increased to 0.42 by March 31, 2022, indicating improved asset utilization. By March 31, 2023, the ratio further increased to 0.52, reflecting even better efficiency in generating revenue from assets.

However, there was a slight decline in the total asset turnover ratio to 0.48 by March 31, 2024, suggesting a potential decrease in efficiency in asset utilization. The ratio then dropped significantly to 0.29 by March 31, 2025, signifying a considerable decrease in revenue generated per dollar of assets.

Overall, while the total asset turnover ratio improved initially, the recent downward trend may indicate challenges in efficiently utilizing assets to generate revenue. It would be advisable for Microchip Technology Inc to further analyze and address the factors impacting its asset turnover efficiency to improve financial performance.