Microchip Technology Inc (MCHP)

Quick ratio

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Cash	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
Receivables	US$ in thousands	1,143,700	1,305,300	1,072,600	997,700	934,000
Total current liabilities	US$ in thousands	2,519,400	3,118,600	1,399,000	2,409,600	1,637,400
Quick ratio		0.83	0.49	0.99	0.53	0.82

March 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($319,700K + $639,400K + $1,143,700K) ÷ $2,519,400K
= 0.83

The quick ratio of Microchip Technology Inc has fluctuated over the past five years, ranging from 0.49 to 0.99. The quick ratio measures the company's ability to meet its short-term obligations using its most liquid assets, excluding inventory. A quick ratio below 1 indicates that the company may have difficulty meeting its current liabilities without relying on inventory sales.

In the most recent fiscal year ending March 31, 2024, the quick ratio stood at 0.83, indicating an improvement compared to the previous year's 0.49. This suggests that Microchip Technology Inc's liquidity position strengthened, as it had a higher proportion of liquid assets relative to its current liabilities.

However, it is important to note that a quick ratio of 0.83 still falls below the ideal threshold of 1, indicating that the company may still face challenges in meeting its short-term obligations without relying on selling inventory. Overall, while there has been an improvement in liquidity from the previous year, Microchip Technology Inc may need to continue monitoring its liquidity position to ensure it can meet its obligations comfortably in the future.