Microchip Technology Inc (MCHP)
Financial leverage ratio
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 15,873,200 | 16,370,300 | 16,199,500 | 16,478,800 | 17,426,100 |
| Total stockholders’ equity | US$ in thousands | 6,657,800 | 6,513,600 | 5,894,800 | 5,337,100 | 5,585,500 |
| Financial leverage ratio | 2.38 | 2.51 | 2.75 | 3.09 | 3.12 |
March 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $15,873,200K ÷ $6,657,800K
= 2.38
The financial leverage ratio for Microchip Technology Inc has shown a decreasing trend over the past five years, indicating an improvement in the company's overall financial leverage position. The ratio has decreased from 3.12 in 2020 to 2.38 in 2024.
A financial leverage ratio below 3 suggests that the company relies less on debt financing compared to its equity, which can be viewed positively by investors and creditors as it signifies a lower risk of financial distress.
Overall, the decreasing trend in the financial leverage ratio for Microchip Technology Inc indicates a strengthening financial position and potentially improved debt management by the company.
Peer comparison
Mar 31, 2024