Microchip Technology Inc (MCHP)

Current ratio

		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	Mar 31, 2020
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	2,217,200
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	1,637,400
Current ratio		2.25	0.88	1.94	1.20	0.98	1.03	1.02	0.98	1.76	1.05	1.78	1.75	1.81	1.92	1.98	0.89	0.85	1.07	0.83	1.35

December 31, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $2,995,800K ÷ $1,330,300K
= 2.25

Microchip Technology Inc's current ratio has exhibited fluctuations over the past few years. The current ratio was 1.35 as of March 31, 2020, indicating that the company had $1.35 in current assets for every $1 in current liabilities. Subsequently, the ratio declined to 0.83 by June 30, 2020, suggesting potential liquidity concerns.

There was a recovery in the current ratio to 1.98 by June 30, 2021, indicating improved liquidity position. The ratio remained relatively strong throughout the following quarters, ranging between 1.75 and 2.25. This suggests that the company had ample current assets to cover its short-term obligations.

However, there were instances of a decrease in the current ratio, such as the ratios of 0.85 on December 31, 2020, and 0.88 on September 30, 2024. These lower ratios may raise concerns about the company's ability to meet its short-term financial obligations.

Overall, while the current ratio fluctuated throughout the period, Microchip Technology Inc generally maintained a healthy liquidity position, with the ratio staying above 1 in most quarters. Investors and analysts will need to monitor the trend closely to assess the company's short-term liquidity risk.