Microchip Technology Inc (MCHP)

Working capital turnover

		Mar 31, 2025	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
Revenue (ttm)	US$ in thousands	4,401,600	4,756,900	5,496,600	6,587,100	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
Total current assets	US$ in thousands	—	2,995,800	2,905,500	2,948,300	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
Total current liabilities	US$ in thousands	—	1,330,300	3,285,700	1,520,300	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
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	—

March 31, 2025 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $4,401,600K ÷ ($—K – $—K)
= —

The working capital turnover ratio for Microchip Technology Inc has shown fluctuating trends over the years.

In September 2020, the ratio was 35.62, indicating that the company was efficiently utilizing its working capital to generate revenue. The ratio dropped significantly to 5.34 in June 2021 and slightly improved to 5.88 in September 2021, suggesting a potential decrease in efficiency in managing working capital during that period.

However, from December 2021 to June 2022, the company managed to improve its working capital turnover, reaching ratios between 6.23 and 6.58. This improvement suggests that Microchip Technology Inc was able to enhance its operational efficiency in utilizing its working capital to support sales and revenue generation.

The ratio significantly spiked to 55.51 in September 2022, indicating a substantial increase in the company's efficiency in utilizing working capital to drive sales. This sharp increase could be a result of various factors, including improved inventory management or faster collections from customers.

Subsequently, the ratio experienced fluctuations, with a peak of 175.27 in June 2023, suggesting an exceptionally high turnover of working capital during that period. However, in March 2024, the ratio dropped to 15.47, indicating a potential decline in efficiency compared to the previous quarter.

From June 2024 onwards, the working capital turnover ratio continued to decrease, reaching 2.86 in December 2024 and remaining unchanged in March 2025. These lower ratios suggest a potential decrease in the company's ability to efficiently utilize its working capital to support revenue generation during these periods.

Overall, the analysis of Microchip Technology Inc's working capital turnover indicates variable trends in the efficiency of working capital management over the specified period, with periods of both improvement and decline in operational efficiency.