Microchip Technology Inc (MCHP)

Debt-to-equity ratio

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Long-term debt	US$ in thousands	5,000,400	5,041,700	7,687,400	7,581,200	8,873,400
Total stockholders’ equity	US$ in thousands	6,657,800	6,513,600	5,894,800	5,337,100	5,585,500
Debt-to-equity ratio		0.75	0.77	1.30	1.42	1.59

March 31, 2024 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $5,000,400K ÷ $6,657,800K
= 0.75

The debt-to-equity ratio of Microchip Technology Inc has shown a decreasing trend over the past five years, indicating a more conservative capital structure. The ratio decreased from 1.59 in March 2020 to 0.75 in March 2024.

A debt-to-equity ratio of 0.75 as of March 31, 2024, suggests that for every dollar of equity, the company has $0.75 in debt. This demonstrates that Microchip Technology Inc is relying more on equity financing rather than debt to fund its operations and growth, which can be considered a positive sign for investors and creditors.

The decreasing trend in the debt-to-equity ratio reflects an improvement in the company's financial leverage and risk profile over the years. This could indicate that the company is managing its debt levels more effectively and is in a better position to weather economic downturns or financial challenges.

Overall, the decreasing debt-to-equity ratio of Microchip Technology Inc is a positive indicator of its financial health and stability, showcasing a prudent approach towards managing its capital structure.