Microchip Technology Inc (MCHP)

Gross profit margin

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Gross profit	US$ in thousands	4,995,700	5,697,900	4,449,600	3,378,800	3,242,100
Revenue	US$ in thousands	7,634,400	8,438,700	6,820,900	5,438,400	5,274,200
Gross profit margin		65.44%	67.52%	65.23%	62.13%	61.47%

March 31, 2024 calculation

Gross profit margin = Gross profit ÷ Revenue
= $4,995,700K ÷ $7,634,400K
= 65.44%

Microchip Technology Inc's gross profit margin has shown a fluctuating trend over the past five years. In the fiscal year ending March 31, 2024, the gross profit margin decreased to 65.44% from 67.52% in the previous year. This decrease could indicate potential challenges in managing production costs or pricing strategies.

Comparing the gross profit margins over the five-year period, the company experienced a gradual improvement from 61.47% in 2020 to 67.52% in 2023 before declining slightly in 2024. This upward trajectory suggests that Microchip Technology Inc had been effectively controlling its cost of goods sold and optimizing its revenue generation.

It is essential for the company to closely monitor and analyze the factors contributing to the fluctuations in the gross profit margin to maintain profitability and sustainable growth over time. By identifying the underlying reasons for these changes, management can implement strategies to enhance operational efficiency, pricing structures, and product mix to maximize profitability in the future.