Microchip Technology Inc (MCHP)

Working capital turnover

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019
Revenue (ttm)	US$ in thousands	7,634,400	8,541,300	8,944,800	8,763,700	8,438,700	8,050,200	7,638,500	7,215,100	6,820,900	6,443,800	6,038,400	5,698,100	5,438,400	5,297,700	5,233,000	5,261,300	5,274,200	5,277,600	5,364,900	5,459,600
Total current assets	US$ in thousands	3,013,000	3,219,600	3,526,400	3,269,600	3,069,300	2,833,700	2,676,000	2,643,200	2,452,600	2,200,500	2,149,100	2,157,100	2,145,200	2,152,500	2,122,100	2,135,000	2,217,200	2,104,000	2,177,800	2,278,500
Total current liabilities	US$ in thousands	2,519,400	3,293,200	3,412,600	3,219,600	3,118,600	1,611,100	2,538,400	1,485,400	1,399,000	1,218,700	1,121,800	1,089,100	2,409,600	2,522,200	1,975,200	2,585,800	1,637,400	2,336,600	2,423,400	2,450,800
Working capital turnover		15.47	—	78.60	175.27	—	6.58	55.51	6.23	6.47	6.56	5.88	5.34	—	—	35.62	—	9.10	—	—	—

March 31, 2024 calculation

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

The working capital turnover for Microchip Technology Inc has fluctuated over the past few quarters. It was 15.47 for Mar 31, 2024, indicating that the company generated $15.47 in net sales revenue for every dollar of working capital invested during that period. This ratio suggests efficient utilization of working capital to generate sales.

However, the working capital turnover was not available for Dec 31, 2023, and Mar 31, 2023, which doesn't allow for a clear trend analysis. The ratio showed a significant increase to 78.60 for Sep 30, 2023, suggesting a substantial improvement in working capital efficiency compared to the previous quarter. This might indicate better management of working capital to drive sales.

In Jun 30, 2023, the working capital turnover was 175.27, which is a remarkably high ratio, indicating a very efficient use of working capital to generate sales during that period. This spike in efficiency may be attributed to specific actions taken by the company to streamline operations and optimize working capital management.

The trend continues with a lower ratio of 6.58 for Dec 31, 2022, indicating a drop in working capital efficiency compared to the previous quarter. Subsequently, the ratio improved to 55.51 for Sep 30, 2022, before decreasing to 6.23 for Jun 30, 2022, and then further to 6.47 for Mar 31, 2022. These lower ratios suggest a period of relatively lower efficiency in utilizing working capital to drive sales.

Looking at the overall trend, there are fluctuations in the working capital turnover ratio, indicating varying efficiencies in managing working capital to generate sales for Microchip Technology Inc over the analyzed period. It is essential for the company to maintain a balance in working capital management to ensure optimal utilization and support sustainable growth in revenue generation.