Microchip Technology Inc (MCHP)

Working capital 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 current assets	US$ in thousands	2,991,300	3,013,000	3,069,300	2,452,600	2,145,200
Total current liabilities	US$ in thousands	1,155,100	2,519,400	3,118,600	1,399,000	2,409,600
Working capital turnover		2.40	15.47	—	6.47	—

March 31, 2025 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $4,401,600K ÷ ($2,991,300K – $1,155,100K)
= 2.40

The working capital turnover of Microchip Technology Inc has shown variations over the past five years. In March 2022, the working capital turnover ratio was 6.47, indicating that the company generated $6.47 in net sales for every dollar of working capital invested. This suggests efficient utilization of working capital during that period.

In March 2024, the working capital turnover ratio increased significantly to 15.47, reflecting a substantial improvement in efficiency in generating sales from working capital. This sharp increase may indicate better management of the company's working capital resources, leading to higher sales with the same level of investment in working capital.

However, in March 2025, the working capital turnover ratio dropped to 2.40, signaling a decrease in efficiency in converting working capital into sales compared to the previous years. This decline may indicate potential challenges in managing working capital effectively to support sales activities during that period.

Overall, fluctuations in the working capital turnover ratio of Microchip Technology Inc suggest varying levels of efficiency in utilizing working capital to generate sales, highlighting the importance of effective working capital management in optimizing operational performance and financial health.