Microchip Technology Inc (MCHP)

Financial leverage 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
Total assets	US$ in thousands	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	17,588,600	17,858,500	18,246,400
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
Financial leverage ratio		2.38	2.28	2.38	2.41	2.51	2.55	2.64	2.71	2.75	2.77	2.84	2.95	3.09	3.13	3.08	3.10	3.12	3.13	3.33	3.45

March 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $15,873,200K ÷ $6,657,800K
= 2.38

The financial leverage ratio of Microchip Technology Inc has been fluctuating over the periods displayed. The ratio was relatively stable around 2.3 to 2.5 in the earlier periods, but then exhibited an increasing trend, reaching a peak of 3.45 as of September 30, 2019. This suggests that the company has been increasing its reliance on debt to finance its operations and investments over time. However, it is important to note that a higher financial leverage ratio indicates higher financial risk, as the company has a greater proportion of debt in its capital structure compared to equity. Management should closely monitor this trend to ensure sustainable and prudent levels of leverage to support the company's growth and financial stability.