Microchip Technology Inc (MCHP)

Quick 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
Cash	US$ in thousands	586,000	286,100	315,100	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
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
Receivables	US$ in thousands	857,200	1,044,300	1,095,800	1,143,700	1,398,100	1,706,200	1,465,000	1,305,300	1,175,000	1,133,200	1,145,000	1,072,600	930,100	985,600	1,000,700	997,700	893,800	903,700	894,300	934,000
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
Quick ratio		1.08	0.40	0.93	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

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($586,000K + $—K + $857,200K) ÷ $1,330,300K
= 1.08

The quick ratio of Microchip Technology Inc has shown some fluctuations over the period under consideration. The quick ratio measures the company's ability to meet its short-term obligations with its most liquid assets. A quick ratio below 1 indicates that the company may have difficulty meeting its short-term liabilities.

In analyzing the trend of Microchip's quick ratio, we can observe that the ratio dipped to 0.49 in June 2020, indicating a potential liquidity issue. However, the ratio improved significantly in the subsequent quarters, reaching its peak in June 2021 at 1.18, reflecting a strong ability to cover short-term liabilities with liquid assets.

Following June 2021, the quick ratio gradually declined but remained above 1 until September 2022, indicating continued stability in the company's liquidity position. However, there was a notable drop in the quick ratio in the subsequent quarters, reaching 0.40 in September 2024, suggesting a potential liquidity strain at that point in time.

Overall, the quick ratio of Microchip Technology Inc has experienced fluctuations, with periods of both strength and weakness in terms of liquidity. It is essential for investors and stakeholders to monitor these trends to assess the company's ability to meet its short-term obligations effectively.