Microchip Technology Inc (MCHP)
Solvency ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.32 | 0.25 | 0.27 | 0.28 | 0.31 | 0.41 | 0.39 | 0.47 | 0.47 | 0.49 | 0.51 | 0.52 | 0.46 | 0.46 | 0.49 | 0.45 | 0.51 | 0.47 | 0.47 | 0.48 |
| Debt-to-capital ratio | 0.43 | 0.36 | 0.39 | 0.40 | 0.44 | 0.51 | 0.51 | 0.56 | 0.57 | 0.58 | 0.59 | 0.61 | 0.59 | 0.59 | 0.60 | 0.58 | 0.61 | 0.59 | 0.61 | 0.62 |
| 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 |
| 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 |
The solvency ratios of Microchip Technology Inc show a fluctuating trend over the past two years. The debt-to-assets ratio has ranged from 0.25 to 0.52, indicating that the company's level of debt relative to its total assets has varied. The debt-to-capital ratio has followed a similar pattern, fluctuating between 0.36 and 0.62. This ratio reflects the proportion of the company's capital that is financed through debt.
The debt-to-equity ratio has shown more significant fluctuations, ranging from 0.57 to 1.65 over the same period. This ratio highlights the extent to which the company's operations are funded by debt versus equity. The increasing trend in the debt-to-equity ratio suggests a higher level of financial risk as the company relies more on debt financing.
Lastly, the financial leverage ratio, which indicates the company's reliance on debt to finance its operations, has fluctuated between 2.28 and 3.45. An increasing financial leverage ratio points towards higher financial risk and a greater reliance on borrowed funds to support the company's activities.
Overall, the solvency ratios of Microchip Technology Inc demonstrate varying levels of debt and financial risk over the past two years, indicating the importance of closely monitoring the company's capital structure and debt management strategies.
Coverage ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 12.93 | 16.56 | 17.71 | 16.50 | 15.27 | 13.08 | 11.14 | 8.80 | 6.77 | 5.14 | 3.40 | 2.66 | 1.95 | 1.61 | 1.55 | 1.43 | 1.30 | 1.49 | 1.56 | 1.38 |
The interest coverage ratio for Microchip Technology Inc has shown a fluctuating trend over the past few quarters. At the end of March 2024, the interest coverage ratio stood at 12.93, indicating the company generated 12.93 times the earnings necessary to cover its interest expense. This ratio has generally been on an upward trajectory since the end of 2021, peaking at 17.71 in September 2023.
The improvement in the interest coverage ratio reflects the company's ability to generate increasing levels of operating income relative to its interest obligations, which is a positive sign of financial health. However, it is important to note that the ratio has experienced some volatility, particularly in the earlier quarters of 2021 and 2022, where it dipped significantly below current levels.
Overall, the recent trend suggests that Microchip Technology Inc has been effectively managing its interest expense through improved earnings performance. Continued monitoring of this ratio will be essential to ensure the company's ability to meet its financial obligations in the long term.