Microchip Technology Inc (MCHP)

Cash ratio

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Cash and cash equivalents	US$ in thousands	319,700	234,000	317,400	280,000	401,000
Short-term investments	US$ in thousands	639,400	0	2,000	2,000	2,000
Total current liabilities	US$ in thousands	2,519,400	3,118,600	1,399,000	2,409,600	1,637,400
Cash ratio		0.38	0.08	0.23	0.12	0.25

March 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($319,700K + $639,400K) ÷ $2,519,400K
= 0.38

The cash ratio for Microchip Technology Inc has shown fluctuations over the past five years. It was relatively low in 2023 at 0.08, indicating the company had limited cash available to cover its short-term liabilities at that time. However, there was a notable improvement in 2024 with a cash ratio of 0.38, suggesting the company had a stronger liquidity position to meet its immediate obligations.

In 2022 and 2020, the cash ratio was 0.23 and 0.25, respectively, indicating that Microchip Technology Inc had a moderate level of cash relative to its current liabilities in those years. This suggests a certain level of financial stability and ability to weather short-term financial challenges.

On the other hand, the cash ratio in 2021 was 0.12, which was relatively lower compared to the other years analyzed. This could indicate a temporary weakness in the company's liquidity position during that period.

Overall, the fluctuation in the cash ratio of Microchip Technology Inc could signal varying levels of liquidity risk and the company's ability to manage its short-term financial obligations over the past five years. It is essential for investors and stakeholders to monitor these fluctuations to assess the company's financial health accurately.