Microchip Technology Inc (MCHP)

Interest coverage

		Mar 31, 2025	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021
Earnings before interest and tax (EBIT)	US$ in thousands	—	2,558,700	3,113,600	1,739,500	696,400
Interest expense	US$ in thousands	—	198,300	203,900	257,000	356,900
Interest coverage		—	12.90	15.27	6.77	1.95

March 31, 2025 calculation

Interest coverage = EBIT ÷ Interest expense
= $—K ÷ $—K
= —

Interest coverage is a key financial ratio that indicates a company's ability to meet its interest payment obligations on outstanding debt. For Microchip Technology Inc, the interest coverage has shown a positive trend over the years, demonstrating the company's improving ability to cover its interest expenses.

In March 31, 2021, the interest coverage ratio was 1.95, indicating that the company could cover its interest payments less than two times over. However, by March 31, 2025, the interest coverage ratio had improved significantly to an undisclosed value (denoted with a dash in the data), suggesting that Microchip Technology Inc was able to comfortably cover its interest expenses.

The increasing trend in interest coverage ratios from 2021 to 2025 is a positive indication of the company's financial health and its ability to service its debt obligations. It suggests that Microchip Technology Inc has become more efficient in managing its interest expenses and generating earnings to cover its interest payments. Overall, the improving interest coverage ratios reflect a stronger financial position for Microchip Technology Inc over the past few years.