Microchip Technology Inc (MCHP)

Debt-to-equity ratio

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019
Long-term debt	US$ in thousands	5,000,400	4,033,300	4,414,700	4,632,200	5,041,700	6,588,700	6,304,900	7,563,900	7,687,400	7,868,500	8,200,600	8,527,400	7,581,200	7,647,800	8,181,400	7,730,000	8,873,400	8,179,700	8,415,300	8,711,400
Total stockholders’ equity	US$ in thousands	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	5,616,600	5,361,300	5,288,300
Debt-to-equity ratio		0.75	0.57	0.63	0.68	0.77	1.04	1.03	1.27	1.30	1.36	1.44	1.54	1.42	1.44	1.50	1.41	1.59	1.46	1.57	1.65

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 fluctuated over the past several quarters, indicating varying levels of financial leverage. As of March 31, 2024, the ratio stands at 0.75, which suggests that the company has $0.75 of debt for every $1 of equity. This represents a decrease from the previous quarter's ratio of 0.57.

The upward trend in the debt-to-equity ratio from the third quarter of 2021 to the first quarter of 2023, with ratios consistently above 1, indicates that the company relied more heavily on debt financing during this period. However, there has been a notable decrease in the ratio from the peak of 1.65 in the second quarter of 2019 to the current level of 0.75.

A lower debt-to-equity ratio generally implies lower financial risk and higher solvency for the company, as it indicates that there is less reliance on debt to finance operations and growth. Investors and creditors may view the decreasing ratio positively as it could signify improved financial health and stability for Microchip Technology Inc. It will be important to continue monitoring the trend of the debt-to-equity ratio in future quarters to assess the company's financial leverage and risk management strategies.