Microchip Technology Inc (MCHP)

Cash ratio

		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
Cash and cash equivalents	US$ in thousands	319,700	281,000	256,600	271,200	234,000	288,900	304,800	377,100	317,400	313,500	253,300	277,700	280,000	370,700	368,300	378,200	401,000	397,100	401,800	434,000
Short-term investments	US$ in thousands	—	—	—	—	0	0	2,000	2,000	2,000	2,000	2,000	2,000	2,000	2,000	2,000	2,000	2,000	5,200	3,300	3,100
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
Cash ratio		0.13	0.09	0.08	0.08	0.08	0.18	0.12	0.26	0.23	0.26	0.23	0.26	0.12	0.15	0.19	0.15	0.25	0.17	0.17	0.18

March 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($319,700K + $—K) ÷ $2,519,400K
= 0.13

The cash ratio of Microchip Technology Inc has fluctuated over the past several quarters. The ratio was relatively low at 0.13 as of March 31, 2024, indicating that the company may have a lower level of cash and cash equivalents compared to its current liabilities. This could suggest that the company might potentially face challenges in meeting its short-term obligations solely with its available cash.

Looking back at historical data, the cash ratio has varied significantly, ranging from 0.08 to 0.26 in recent quarters. The peak cash ratio of 0.26 in June 30, 2022, and September 30, 2021, could imply that the company had strong liquidity positions during these periods. On the other hand, the low points, such as 0.08 in December 31, 2023, March 31, 2023, and June 30, 2023, highlight potential liquidity concerns.

It is important to monitor the cash ratio over time to assess the company's ability to cover its short-term liabilities. An upward trend in the cash ratio indicates improving liquidity, while a downward trend may raise concerns about the company's short-term financial health and ability to manage its obligations.