Microchip Technology Inc (MCHP)

Current ratio

		Mar 31, 2025	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021
Total current assets	US$ in thousands	2,991,300	3,013,000	3,069,300	2,452,600	2,145,200
Total current liabilities	US$ in thousands	1,155,100	2,519,400	3,118,600	1,399,000	2,409,600
Current ratio		2.59	1.20	0.98	1.75	0.89

March 31, 2025 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $2,991,300K ÷ $1,155,100K
= 2.59

The current ratio of Microchip Technology Inc has exhibited fluctuations over the past five years. In March 31, 2021, the current ratio was 0.89, indicating that the company had less current assets relative to its current liabilities, which may pose a liquidity risk. However, there was a significant improvement in the current ratio in March 31, 2022, reaching 1.75, suggesting better liquidity position with sufficient current assets to cover current liabilities.

Subsequently, the current ratio decreased to 0.98 in March 31, 2023, signaling a potential liquidity concern as the company may struggle to meet its short-term obligations. In March 31, 2024, there was a slight improvement with a current ratio of 1.20, showing a better ability to cover current liabilities.

The most recent data as of March 31, 2025, shows a notable increase in the current ratio to 2.59, reflecting a strong liquidity position with ample current assets to meet short-term obligations. Overall, the trend in the current ratio for Microchip Technology Inc indicates variability in liquidity levels, with efforts made to enhance liquidity over the years.