Microchip Technology Inc (MCHP)
Liquidity ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 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 | 0.90 | 0.90 | 0.93 |
| Quick ratio | 0.58 | 0.51 | 0.58 | 0.54 | 0.49 | 0.91 | 0.57 | 1.03 | 0.99 | 1.02 | 1.11 | 1.18 | 0.53 | 0.50 | 0.64 | 0.49 | 0.82 | 0.52 | 0.52 | 0.56 |
| 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 |
Microchip Technology Inc's liquidity ratios have shown some fluctuation over the past few quarters. The current ratio, which measures the company's ability to cover short-term liabilities with current assets, has varied between 0.98 and 1.98. While the ratio has generally been above 1, indicating a healthy liquidity position, it dipped to 0.98 in the most recent quarter, possibly signaling a tighter liquidity situation.
The quick ratio, a more stringent measure of liquidity as it excludes inventory from current assets, has ranged from 0.49 to 1.18. This ratio shows a similar trend to the current ratio, with a decrease in the most recent quarter to 0.51, suggesting potential challenges in meeting short-term obligations without relying on inventory.
The cash ratio, which is the most conservative liquidity measure as it only considers cash and cash equivalents, has fluctuated between 0.08 and 0.26. This ratio provides insight into the company's ability to cover immediate liabilities with cash on hand, and the downward trend from 0.18 to 0.09 in the last quarter may indicate a decreasing ability to meet short-term obligations solely with cash.
Overall, Microchip Technology Inc's liquidity position, as reflected by these ratios, highlights some variability and potential challenges in maintaining strong cash reserves to cover short-term obligations consistently. Further monitoring of liquidity management practices may be warranted to ensure financial stability.
See also:
Microchip Technology Inc Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| 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 conversion cycle | days | 207.25 | 198.28 | 202.88 | 197.71 | 180.04 | 164.87 | 147.00 | 147.88 | 135.85 | 127.17 | 128.08 | 133.19 | 132.99 | 134.57 | 143.06 | 142.01 | 143.47 | 145.70 | 143.49 | 138.17 |
The cash conversion cycle of Microchip Technology Inc has shown some fluctuations over the periods provided. The cash conversion cycle is a measure of how long it takes for a company to convert its resources into cash flows.
Based on the data provided:
- The cash conversion cycle ranged from 127.17 days to 207.25 days over the periods analyzed.
- Generally, a decrease in the cash conversion cycle indicates that the company is managing its working capital more efficiently, while an increase may suggest inefficiencies or changes in operating processes affecting the cash flow cycle.
- The company's lowest cash conversion cycle of 127.17 days was observed on March 31, 2022, showcasing efficient management of working capital during that period.
- However, a peak in the cash conversion cycle was recorded on March 31, 2024, at 207.25 days, indicating a longer time taken to convert resources into cash compared to other periods.
- Monitoring the cash conversion cycle can help in assessing the company's liquidity and efficiency in managing its operational and financial activities.
In conclusion, the fluctuations in Microchip Technology Inc's cash conversion cycle highlight the importance of monitoring working capital efficiency and the effectiveness of operational processes in converting resources into cash flows.