Microchip Technology Inc (MCHP)

Cash ratio

		Mar 31, 2025	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021
Cash and cash equivalents	US$ in thousands	771,700	319,700	234,000	317,400	280,000
Short-term investments	US$ in thousands	—	639,400	0	2,000	2,000
Total current liabilities	US$ in thousands	1,155,100	2,519,400	3,118,600	1,399,000	2,409,600
Cash ratio		0.67	0.38	0.08	0.23	0.12

March 31, 2025 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($771,700K + $—K) ÷ $1,155,100K
= 0.67

The cash ratio of Microchip Technology Inc has shown volatility over the years, ranging from 0.08 to 0.67. The ratio indicates the company's ability to cover its short-term liabilities with its cash and cash equivalents. In March 2025, the cash ratio has increased significantly to 0.67, demonstrating an improvement in the company's liquidity position compared to previous years. This suggests that Microchip Technology Inc has a higher proportion of cash readily available to meet its short-term financial obligations. However, fluctuations in the cash ratio over the years highlight the importance of closely monitoring the company's liquidity management strategies to ensure sustainable financial health.