Microchip Technology Inc (MCHP)

Working capital turnover

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Revenue	US$ in thousands	7,634,400	8,438,700	6,820,900	5,438,400	5,274,200
Total current assets	US$ in thousands	3,013,000	3,069,300	2,452,600	2,145,200	2,217,200
Total current liabilities	US$ in thousands	2,519,400	3,118,600	1,399,000	2,409,600	1,637,400
Working capital turnover		15.47	—	6.47	—	9.10

March 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $7,634,400K ÷ ($3,013,000K – $2,519,400K)
= 15.47

Based on the provided working capital turnover figures for Microchip Technology Inc, we can observe that there has been a significant improvement in the efficiency of the company in utilizing its working capital over the years.

In fiscal year 2020, the working capital turnover ratio stood at 9.10, indicating that the company generated $9.10 in revenue for every dollar of working capital invested. This figure increased to 6.47 in fiscal year 2022 and then notably improved to 15.47 in fiscal year 2024, highlighting a more efficient utilization of working capital to generate sales.

The fluctuation in the working capital turnover ratio over the years suggests variations in the company's ability to efficiently manage its working capital and convert it into revenue. The significant improvement in the ratio in fiscal year 2024 indicates a boost in operational efficiency and effectiveness in utilizing working capital resources to drive revenue generation.

Overall, the trend in the working capital turnover ratio demonstrates Microchip Technology Inc's ability to enhance its operational performance and optimize the utilization of working capital to support its business activities and revenue growth.