Microchip Technology Inc (MCHP)

Return on equity (ROE)

		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
Net income (ttm)	US$ in thousands	308,800	781,600	1,369,800	1,906,900	2,356,200	2,517,300	2,396,900	2,237,700	2,071,600	1,844,100	1,539,900	1,285,500	963,600	647,000	478,600	349,400	333,300	608,200	643,500	570,600
Total stockholders’ equity	US$ in thousands	6,031,500	6,275,900	6,406,000	6,657,800	7,080,200	6,968,500	6,831,300	6,513,600	6,311,600	6,103,100	5,977,900	5,894,800	5,803,300	5,702,900	5,519,900	5,337,100	5,297,000	5,443,700	5,501,300	5,585,500
ROE		5.12%	12.45%	21.38%	28.64%	33.28%	36.12%	35.09%	34.35%	32.82%	30.22%	25.76%	21.81%	16.60%	11.35%	8.67%	6.55%	6.29%	11.17%	11.70%	10.22%

December 31, 2024 calculation

ROE = Net income (ttm) ÷ Total stockholders’ equity
= $308,800K ÷ $6,031,500K
= 5.12%

Microchip Technology Inc has experienced fluctuations in its return on equity (ROE) over the analyzed period. The ROE started at a modest 10.22% as of March 31, 2020, and showed a gradual improvement reaching 11.70% by June 30, 2020. However, the ROE dipped to 6.29% by the end of December 2020, likely indicating a decline in profitability or relatively higher equity base during that period.

Subsequently, there was a slight recovery in ROE to 6.55% by March 31, 2021, followed by a more significant improvement to 8.67% by June 30, 2021. The trend continued with ROE rising to 11.35% by September 30, 2021, and a notable increase to 16.60% by December 31, 2021, indicating an enhancement in the company's profitability relative to its equity base.

The most substantial improvements in ROE were seen in the latter half of the analyzed period, with ROE reaching 21.81% by March 31, 2022, 25.76% by June 30, 2022, and continuing to climb to 36.12% by September 30, 2023. These figures suggest that the company's profitability significantly outpaced its equity growth during these periods, reflecting positively on its efficiency in generating returns for shareholders.

However, there was a slight decline in ROE to 28.64% by March 31, 2024, further dropping to 5.12% by the end of December 31, 2024. This decline might indicate challenges or changes in the company's operations affecting its profitability relative to shareholders' equity.

Overall, Microchip Technology Inc's ROE trend demonstrates both periods of improvement and decline, reflecting changes in the company's profitability levels relative to its equity base over the analyzed period. Investors and stakeholders may observe these trends to assess the company's ability to generate returns on shareholders' investment.