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 Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

Microchip Technology Inc., income tax expense (benefit), continuing operations

US$ in thousands

Microsoft Excel
12 months ended: Mar 31, 2022 Mar 31, 2021 Mar 31, 2020 Mar 31, 2019 Mar 31, 2018 Mar 31, 2017
U.S. Federal 191,600 54,800 21,100 (98,000) 369,400 21,287
State 3,700 2,000 1,000 (5,300) 500 1,004
Foreign (6,200) 72,200 48,000 14,100 60,800 23,792
Current expense (benefit) 189,100 129,000 70,100 (89,200) 430,700 46,083
U.S. Federal (78,700) (215,400) (127,800) 11,900 82,500 (114,743)
State (9,100) (22,900) (13,200) 600 100 (5,409)
Foreign 95,700 99,400 (349,300) (74,700) (31,400) (6,736)
Deferred expense (benefit) 7,900 (138,900) (490,300) (62,200) 51,200 (126,888)
Income tax provision (benefit) 197,000 (9,900) (420,200) (151,400) 481,900 (80,805)

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
Current expense (benefit) Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Microchip Technology Inc. current expense (benefit) increased from 2020 to 2021 and from 2021 to 2022.
Deferred expense (benefit) Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Microchip Technology Inc. deferred expense (benefit) increased from 2020 to 2021 and from 2021 to 2022.
Income tax provision (benefit) Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Microchip Technology Inc. income tax provision (benefit) increased from 2020 to 2021 and from 2021 to 2022.

Effective Income Tax Rate (EITR)

Microchip Technology Inc., effective income tax rate (EITR) reconciliation

Microsoft Excel
Mar 31, 2022 Mar 31, 2021 Mar 31, 2020 Mar 31, 2019 Mar 31, 2018 Mar 31, 2017
Statutory federal tax rate 21.00% 21.00% 21.00% 21.00% 31.55% 35.00%
Effective tax rate 13.29% -2.92% -279.39% -74.03% 65.36% -90.00%

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
Effective tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Microchip Technology Inc. effective tax rate increased from 2020 to 2021 and from 2021 to 2022.

Components of Deferred Tax Assets and Liabilities

Microchip Technology Inc., components of deferred tax assets and liabilities

US$ in thousands

Microsoft Excel
Mar 31, 2022 Mar 31, 2021 Mar 31, 2020 Mar 31, 2019 Mar 31, 2018 Mar 31, 2017
Deferred income on shipments to distributors — — — — 39,100 55,674
Accrued expenses 81,600 83,600 80,400 91,400 91,200 110,347
Capital loss carryforward 9,800 6,300 9,400 9,600 10,600 12,927
Deferred revenue 90,400 — — — — —
Income tax credits 306,600 331,100 351,100 376,500 178,400 243,049
Intangible assets 1,479,900 1,581,500 1,694,800 1,608,100 — —
Inventory valuation 26,800 46,000 48,500 45,000 10,700 14,608
Lease liabilities 36,100 37,100 20,200 — — —
Net operating loss carryforward 77,000 68,000 74,800 94,300 101,100 91,606
Property, plant and equipment 40,800 32,700 31,700 23,600 25,700 59,700
Share-based compensation 45,800 46,500 39,800 42,400 31,400 42,547
Other 5,500 17,400 14,000 12,600 — —
Gross deferred tax assets 2,200,300 2,250,200 2,364,700 2,303,500 488,200 630,458
Valuation allowances (290,300) (290,300) (303,500) (332,100) (204,500) (210,120)
Deferred tax assets, net of valuation allowances 1,910,000 1,959,900 2,061,200 1,971,400 283,700 420,338
Convertible debt (22,700) (53,900) (228,700) (279,300) (304,400) (606,674)
Intangible assets (92,400) (158,100) (365,100) (721,000) (66,600) (147,543)
ROU assets (33,600) (34,500) (24,300) — — —
Other (4,000) (8,100) (13,100) — (18,300) (6,296)
Deferred tax liabilities (152,700) (254,600) (631,200) (1,000,300) (389,300) (760,513)
Net deferred tax asset (liability) 1,757,300 1,705,300 1,430,000 971,100 (105,600) (340,175)

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
Gross deferred tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Microchip Technology Inc. gross deferred tax assets decreased from 2020 to 2021 and from 2021 to 2022.
Deferred tax assets, net of valuation allowances Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Microchip Technology Inc. deferred tax assets, net of valuation allowances decreased from 2020 to 2021 and from 2021 to 2022.
Net deferred tax asset (liability) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Microchip Technology Inc. net deferred tax asset (liability) increased from 2020 to 2021 and from 2021 to 2022.

Deferred Tax Assets and Liabilities, Classification

Microchip Technology Inc., deferred tax assets and liabilities, classification

US$ in thousands

Microsoft Excel
Mar 31, 2022 Mar 31, 2021 Mar 31, 2020 Mar 31, 2019 Mar 31, 2018 Mar 31, 2017
Non-current deferred tax assets 1,797,100 1,749,200 1,748,500 1,677,200 100,200 68,870
Non-current deferred tax liability 39,800 43,900 318,500 706,100 205,800 409,045

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
Non-current deferred tax assets Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Microchip Technology Inc. non-current deferred tax assets increased from 2020 to 2021 and from 2021 to 2022.
Non-current deferred tax liability Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Microchip Technology Inc. non-current deferred tax liability decreased from 2020 to 2021 and from 2021 to 2022.

Adjustments to Financial Statements: Removal of Deferred Taxes

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: Noncurrent deferred tax assets, net 1,797,100 1,749,200 1,748,500 1,677,200 100,200 68,870
Total assets (adjusted) 14,402,400 14,729,600 15,677,600 16,672,800 8,157,000 7,618,011
Adjustment to Total Liabilities
Total liabilities (as reported) 10,304,700 11,141,700 11,840,600 13,062,500 4,977,400 4,416,170
Less: Noncurrent deferred tax liabilities, net 39,800 43,900 318,500 706,100 205,800 409,045
Total liabilities (adjusted) 10,264,900 11,097,800 11,522,100 12,356,400 4,771,600 4,007,125
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: Net deferred tax assets (liabilities) 1,757,300 1,705,300 1,430,000 971,100 (105,600) (340,175)
Stockholders’ equity (adjusted) 4,137,500 3,631,800 4,155,500 4,316,400 3,385,400 3,610,886
Adjustment to Net Income
Net income (as reported) 1,285,500 349,400 570,600 355,900 255,400 164,639
Add: Deferred income tax expense (benefit) 7,900 (138,900) (490,300) (62,200) 51,200 (126,888)
Net income (adjusted) 1,293,400 210,500 80,300 293,700 306,600 37,751

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 Deferred Taxes (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
Net Profit Margin
Reported net profit margin 18.85% 6.42% 10.82% 6.65% 6.42% 4.83%
Adjusted net profit margin 18.96% 3.87% 1.52% 5.49% 7.70% 1.11%
Total Asset Turnover
Reported total asset turnover 0.42 0.33 0.30 0.29 0.48 0.44
Adjusted total asset turnover 0.47 0.37 0.34 0.32 0.49 0.45
Financial Leverage
Reported financial leverage 2.75 3.09 3.12 3.47 2.52 2.35
Adjusted financial leverage 3.48 4.06 3.77 3.86 2.41 2.11
Return on Equity (ROE)
Reported ROE 21.81% 6.55% 10.22% 6.73% 7.79% 5.03%
Adjusted ROE 31.26% 5.80% 1.93% 6.80% 9.06% 1.05%
Return on Assets (ROA)
Reported ROA 7.94% 2.12% 3.27% 1.94% 3.09% 2.14%
Adjusted ROA 8.98% 1.43% 0.51% 1.76% 3.76% 0.50%

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 net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Microchip Technology Inc. adjusted net profit margin ratio improved from 2020 to 2021 and from 2021 to 2022.
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 A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Microchip Technology Inc. adjusted financial leverage ratio increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Microchip Technology Inc. adjusted ROE improved from 2020 to 2021 and from 2021 to 2022.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Microchip Technology Inc. adjusted ROA improved from 2020 to 2021 and from 2021 to 2022.

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

Adjusted Net Profit Margin

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
Net sales 6,820,900 5,438,400 5,274,200 5,349,500 3,980,800 3,407,807
Profitability Ratio
Net profit margin1 18.85% 6.42% 10.82% 6.65% 6.42% 4.83%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income 1,293,400 210,500 80,300 293,700 306,600 37,751
Net sales 6,820,900 5,438,400 5,274,200 5,349,500 3,980,800 3,407,807
Profitability Ratio
Adjusted net profit margin2 18.96% 3.87% 1.52% 5.49% 7.70% 1.11%

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 Net profit margin = 100 × Net income ÷ Net sales
= 100 × 1,285,500 ÷ 6,820,900 = 18.85%

2 Adjusted net profit margin = 100 × Adjusted net income ÷ Net sales
= 100 × 1,293,400 ÷ 6,820,900 = 18.96%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Microchip Technology Inc. adjusted net profit margin ratio improved from 2020 to 2021 and from 2021 to 2022.

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 Deferred Taxes
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 14,402,400 14,729,600 15,677,600 16,672,800 8,157,000 7,618,011
Activity Ratio
Adjusted total asset turnover2 0.47 0.37 0.34 0.32 0.49 0.45

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 ÷ 14,402,400 = 0.47

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 Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted total assets 14,402,400 14,729,600 15,677,600 16,672,800 8,157,000 7,618,011
Adjusted stockholders’ equity 4,137,500 3,631,800 4,155,500 4,316,400 3,385,400 3,610,886
Solvency Ratio
Adjusted financial leverage2 3.48 4.06 3.77 3.86 2.41 2.11

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
= 14,402,400 ÷ 4,137,500 = 3.48

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Microchip Technology Inc. adjusted financial leverage ratio increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.

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 Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income 1,293,400 210,500 80,300 293,700 306,600 37,751
Adjusted stockholders’ equity 4,137,500 3,631,800 4,155,500 4,316,400 3,385,400 3,610,886
Profitability Ratio
Adjusted ROE2 31.26% 5.80% 1.93% 6.80% 9.06% 1.05%

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 × Adjusted net income ÷ Adjusted stockholders’ equity
= 100 × 1,293,400 ÷ 4,137,500 = 31.26%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Microchip Technology Inc. adjusted ROE improved from 2020 to 2021 and from 2021 to 2022.

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 Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income 1,293,400 210,500 80,300 293,700 306,600 37,751
Adjusted total assets 14,402,400 14,729,600 15,677,600 16,672,800 8,157,000 7,618,011
Profitability Ratio
Adjusted ROA2 8.98% 1.43% 0.51% 1.76% 3.76% 0.50%

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 × Adjusted net income ÷ Adjusted total assets
= 100 × 1,293,400 ÷ 14,402,400 = 8.98%

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