Microchip Technology Inc (MCHP)
Profitability ratios
Return on sales
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 65.44% | 67.52% | 65.23% | 62.13% | 61.47% |
| Operating profit margin | 33.68% | 36.93% | 27.12% | 18.35% | 12.27% |
| Pretax margin | 30.99% | 34.48% | 21.73% | 6.24% | 2.85% |
| Net profit margin | 24.98% | 26.52% | 18.85% | 6.42% | 10.82% |
The profitability ratios of Microchip Technology Inc have shown a generally positive trend over the past five years. The gross profit margin has remained relatively stable, indicating the company's ability to efficiently manage production costs and generate profits from sales. The operating profit margin has shown consistent improvement, reflecting the company's effectiveness in controlling operating expenses and increasing operational efficiency.
The pretax margin has exhibited a significant upward trend, indicating the company's improved ability to generate profits before accounting for taxes. This suggests effective management of both revenue generation and cost control measures. The net profit margin has also shown improvement over the years, indicating the company's ability to generate profits after all expenses, including taxes, have been accounted for.
Overall, Microchip Technology Inc's profitability ratios suggest a strong financial performance, with increasing profitability and efficient cost management strategies contributing to the company's success.
Return on investment
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 16.20% | 19.03% | 11.42% | 6.06% | 3.71% |
| Return on assets (ROA) | 12.01% | 13.67% | 7.94% | 2.12% | 3.27% |
| Return on total capital | 21.99% | 26.95% | 12.81% | 5.39% | 4.48% |
| Return on equity (ROE) | 28.64% | 34.35% | 21.81% | 6.55% | 10.22% |
Microchip Technology Inc has demonstrated consistent improvement in its profitability ratios over the past five years.
The operating return on assets (Operating ROA) has shown an increasing trend, indicating that the company has been effective in generating operating income relative to its total assets. This efficiency in asset utilization has steadily improved from 3.71% in 2020 to 16.20% in 2024.
Similarly, the return on assets (ROA) and return on total capital have also shown positive trends, indicating higher profitability and efficiency in generating returns from both assets and total capital employed. This demonstrates that the company has been able to generate higher returns on its investments over the years.
The return on equity (ROE) has also significantly increased, reflecting the company's ability to generate profit for its shareholders from the equity invested. Microchip Technology Inc's ROE has improved from 10.22% in 2020 to 28.64% in 2024, showcasing a strong financial performance and increased shareholder value.
Overall, the profitability ratios of Microchip Technology Inc indicate a consistent and positive trend, reflecting the company's strong financial performance and effective utilization of its assets and capital.