Stock Analysis on Net
Stock Analysis on Net

Microchip Technology Inc. (NASDAQ:MCHP)

This company has been moved to the archive! The financial data has not been updated since February 2, 2023.

Analysis of Goodwill and Intangible Assets

Microsoft Excel

Goodwill and Intangible Asset Disclosure

Microchip Technology Inc., balance sheet: goodwill and intangible assets

US$ in thousands

Microsoft Excel
Mar 31, 2022 Mar 31, 2021 Mar 31, 2020 Mar 31, 2019 Mar 31, 2018 Mar 31, 2017
Core and developed technology 7,390,200 7,371,300 7,331,900 7,413,000 1,952,300 1,932,329
Customer-related 200,300 835,200 903,600 917,100 716,900 716,945
In-process research and development 6,400 7,700 8,800 7,700 12,100 38,511
Software licenses 191,200 124,600 — — — —
Distribution rights and other 400 5,600 126,000 7,600 1,800 18,727
Intangible assets, gross amount 7,788,500 8,344,400 8,370,300 8,345,400 2,683,100 2,706,512
Accumulated amortization (3,745,400) (3,549,600) (2,668,000) (1,659,800) (1,021,100) (558,420)
Intangible assets, net amount 4,043,100 4,794,800 5,702,300 6,685,600 1,662,000 2,148,092
Goodwill 6,673,600 6,670,600 6,664,800 6,663,900 2,299,000 2,299,009
Intangible assets and goodwill 10,716,700 11,465,400 12,367,100 13,349,500 3,961,000 4,447,101

Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).

Item Description The company
Intangible assets, net amount Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Microchip Technology Inc. intangible assets, net amount decreased from 2020 to 2021 and from 2021 to 2022.
Goodwill Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Microchip Technology Inc. goodwill increased from 2020 to 2021 and from 2021 to 2022.
Intangible assets and goodwill Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Microchip Technology Inc. intangible assets and goodwill decreased from 2020 to 2021 and from 2021 to 2022.

Adjustments to Financial Statements: Removal of Goodwill

Microchip Technology Inc., adjustments to financial statements

US$ in thousands

Microsoft Excel
Mar 31, 2022 Mar 31, 2021 Mar 31, 2020 Mar 31, 2019 Mar 31, 2018 Mar 31, 2017
Adjustment to Total Assets
Total assets (as reported) 16,199,500 16,478,800 17,426,100 18,350,000 8,257,200 7,686,881
Less: Goodwill 6,673,600 6,670,600 6,664,800 6,663,900 2,299,000 2,299,009
Total assets (adjusted) 9,525,900 9,808,200 10,761,300 11,686,100 5,958,200 5,387,872
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported) 5,894,800 5,337,100 5,585,500 5,287,500 3,279,800 3,270,711
Less: Goodwill 6,673,600 6,670,600 6,664,800 6,663,900 2,299,000 2,299,009
Stockholders’ equity (adjusted) (778,800) (1,333,500) (1,079,300) (1,376,400) 980,800 971,702

Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).

Microchip Technology Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Microchip Technology Inc., adjusted financial ratios

Microsoft Excel
Mar 31, 2022 Mar 31, 2021 Mar 31, 2020 Mar 31, 2019 Mar 31, 2018 Mar 31, 2017
Total Asset Turnover
Reported total asset turnover 0.42 0.33 0.30 0.29 0.48 0.44
Adjusted total asset turnover 0.72 0.55 0.49 0.46 0.67 0.63
Financial Leverage
Reported financial leverage 2.75 3.09 3.12 3.47 2.52 2.35
Adjusted financial leverage — — — — 6.07 5.54
Return on Equity (ROE)
Reported ROE 21.81% 6.55% 10.22% 6.73% 7.79% 5.03%
Adjusted ROE — — — — 26.04% 16.94%
Return on Assets (ROA)
Reported ROA 7.94% 2.12% 3.27% 1.94% 3.09% 2.14%
Adjusted ROA 13.49% 3.56% 5.30% 3.05% 4.29% 3.06%

Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Microchip Technology Inc. adjusted total asset turnover ratio improved from 2020 to 2021 and from 2021 to 2022.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Microchip Technology Inc. adjusted ROA deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.

Microchip Technology Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Microsoft Excel
Mar 31, 2022 Mar 31, 2021 Mar 31, 2020 Mar 31, 2019 Mar 31, 2018 Mar 31, 2017
As Reported
Selected Financial Data (US$ in thousands)
Net sales 6,820,900 5,438,400 5,274,200 5,349,500 3,980,800 3,407,807
Total assets 16,199,500 16,478,800 17,426,100 18,350,000 8,257,200 7,686,881
Activity Ratio
Total asset turnover1 0.42 0.33 0.30 0.29 0.48 0.44
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net sales 6,820,900 5,438,400 5,274,200 5,349,500 3,980,800 3,407,807
Adjusted total assets 9,525,900 9,808,200 10,761,300 11,686,100 5,958,200 5,387,872
Activity Ratio
Adjusted total asset turnover2 0.72 0.55 0.49 0.46 0.67 0.63

Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).

2022 Calculations

1 Total asset turnover = Net sales ÷ Total assets
= 6,820,900 ÷ 16,199,500 = 0.42

2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 6,820,900 ÷ 9,525,900 = 0.72

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Microchip Technology Inc. adjusted total asset turnover ratio improved from 2020 to 2021 and from 2021 to 2022.

Adjusted Financial Leverage

Microsoft Excel
Mar 31, 2022 Mar 31, 2021 Mar 31, 2020 Mar 31, 2019 Mar 31, 2018 Mar 31, 2017
As Reported
Selected Financial Data (US$ in thousands)
Total assets 16,199,500 16,478,800 17,426,100 18,350,000 8,257,200 7,686,881
Stockholders’ equity 5,894,800 5,337,100 5,585,500 5,287,500 3,279,800 3,270,711
Solvency Ratio
Financial leverage1 2.75 3.09 3.12 3.47 2.52 2.35
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted total assets 9,525,900 9,808,200 10,761,300 11,686,100 5,958,200 5,387,872
Adjusted stockholders’ equity (778,800) (1,333,500) (1,079,300) (1,376,400) 980,800 971,702
Solvency Ratio
Adjusted financial leverage2 — — — — 6.07 5.54

Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).

2022 Calculations

1 Financial leverage = Total assets ÷ Stockholders’ equity
= 16,199,500 ÷ 5,894,800 = 2.75

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 9,525,900 ÷ -778,800 = —

Adjusted Return on Equity (ROE)

Microsoft Excel
Mar 31, 2022 Mar 31, 2021 Mar 31, 2020 Mar 31, 2019 Mar 31, 2018 Mar 31, 2017
As Reported
Selected Financial Data (US$ in thousands)
Net income 1,285,500 349,400 570,600 355,900 255,400 164,639
Stockholders’ equity 5,894,800 5,337,100 5,585,500 5,287,500 3,279,800 3,270,711
Profitability Ratio
ROE1 21.81% 6.55% 10.22% 6.73% 7.79% 5.03%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income 1,285,500 349,400 570,600 355,900 255,400 164,639
Adjusted stockholders’ equity (778,800) (1,333,500) (1,079,300) (1,376,400) 980,800 971,702
Profitability Ratio
Adjusted ROE2 — — — — 26.04% 16.94%

Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).

2022 Calculations

1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 1,285,500 ÷ 5,894,800 = 21.81%

2 Adjusted ROE = 100 × Net income ÷ Adjusted stockholders’ equity
= 100 × 1,285,500 ÷ -778,800 = —

Adjusted Return on Assets (ROA)

Microsoft Excel
Mar 31, 2022 Mar 31, 2021 Mar 31, 2020 Mar 31, 2019 Mar 31, 2018 Mar 31, 2017
As Reported
Selected Financial Data (US$ in thousands)
Net income 1,285,500 349,400 570,600 355,900 255,400 164,639
Total assets 16,199,500 16,478,800 17,426,100 18,350,000 8,257,200 7,686,881
Profitability Ratio
ROA1 7.94% 2.12% 3.27% 1.94% 3.09% 2.14%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income 1,285,500 349,400 570,600 355,900 255,400 164,639
Adjusted total assets 9,525,900 9,808,200 10,761,300 11,686,100 5,958,200 5,387,872
Profitability Ratio
Adjusted ROA2 13.49% 3.56% 5.30% 3.05% 4.29% 3.06%

Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).

2022 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 1,285,500 ÷ 16,199,500 = 7.94%

2 Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 1,285,500 ÷ 9,525,900 = 13.49%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Microchip Technology Inc. adjusted ROA deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.