Microchip Technology Inc (MCHP)

Operating return on assets (Operating ROA)

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
Operating income (ttm) US$ in thousands 650,100 1,148,600 1,887,000 2,571,000 3,165,500 3,447,700 3,317,800 3,116,000 2,817,500 2,520,900 2,182,100 1,849,600 1,608,100 1,338,700 1,148,600 998,100 850,800 736,400 693,800 647,100
Total assets US$ in thousands 15,632,200 15,622,300 15,839,700 15,873,200 16,143,000 16,601,400 16,494,600 16,370,300 16,116,100 16,141,100 16,208,400 16,199,500 16,047,200 16,215,000 16,277,800 16,478,800 16,576,100 16,770,900 17,028,100 17,426,100
Operating ROA 4.16% 7.35% 11.91% 16.20% 19.61% 20.77% 20.11% 19.03% 17.48% 15.62% 13.46% 11.42% 10.02% 8.26% 7.06% 6.06% 5.13% 4.39% 4.07% 3.71%

December 31, 2024 calculation

Operating ROA = Operating income (ttm) ÷ Total assets
= $650,100K ÷ $15,632,200K
= 4.16%

Operating return on assets (Operating ROA) is a key financial ratio that indicates how efficiently a company is generating profit from its assets by focusing on its core operations. By analyzing the data provided for Microchip Technology Inc's Operating ROA over the period from March 31, 2020, to December 31, 2024, we can observe the following trends:

- The Operating ROA for Microchip Technology Inc has shown a generally increasing trend from 3.71% as of March 31, 2020, to a peak of 20.77% as of September 30, 2023.
- This improvement in Operating ROA indicates that the company has been effectively utilizing its assets to generate operating profits over the specified period.
- However, there was a decline in the Operating ROA in the subsequent quarters, with a notable drop to 4.16% as of December 31, 2024. This reduction suggests a possible decrease in operational efficiency or profitability during that time frame.
- It’s important to note that while Operating ROA has shown fluctuations and a downward trend in the later periods, the overall performance of Microchip Technology Inc in terms of generating operating profit from its assets has been positive, considering the earlier substantial improvements in the ratio.

In conclusion, the fluctuating trend in Microchip Technology Inc's Operating ROA highlights the importance of assessing the company's ability to efficiently utilize its assets to drive operating profitability. Further analysis and comparison with industry benchmarks may provide additional insights into the company's operational efficiency and financial performance.