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.

Common-Size Balance Sheet: Assets 

Microchip Technology Inc., common-size consolidated balance sheet: assets

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Mar 31, 2022 Mar 31, 2021 Mar 31, 2020 Mar 31, 2019 Mar 31, 2018 Mar 31, 2017
Cash and cash equivalents 1.96 1.70 2.30 2.34 10.92 11.82
Short-term investments 0.01 0.01 0.01 0.01 15.69 5.13
Accounts receivable, net 6.62 6.05 5.36 4.80 6.83 6.22
Inventories 5.27 4.04 3.93 3.88 5.77 5.43
Assets held for sale 0.00 0.00 0.00 0.00 0.00 0.08
Other current assets 1.27 1.22 1.12 1.04 1.45 1.30
Current assets 15.14% 13.02% 12.72% 12.07% 40.65% 29.99%
Property, plant and equipment, net 5.97 5.19 5.03 5.43 9.30 8.89
Long-term investments 0.00 0.00 0.00 0.00 0.00 1.40
Goodwill 41.20 40.48 38.25 36.32 27.84 29.91
Intangible assets, net 24.96 29.10 32.72 36.43 20.13 27.94
Long-term deferred tax assets 11.09 10.61 10.03 9.14 1.21 0.90
Other assets 1.64 1.60 1.25 0.61 0.87 0.98
Long-term assets 84.86% 86.98% 87.28% 87.93% 59.35% 70.01%
Total assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

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).

The analysis of the financial data reveals several notable trends in the composition of assets over the observed periods.

Liquidity and Current Asset Composition
Cash and cash equivalents as a percentage of total assets showed a marked decline from 11.82% in 2017 to below 2% by 2021 and 2022, indicating a reduction in liquid cash holdings relative to the asset base. Short-term investments exhibited significant volatility, peaking sharply at 15.69% in 2018 but falling to almost negligible levels (0.01%) thereafter, suggesting a strategic shift away from short-term marketable securities.
Accounts receivable, net, decreased from 6.22% in 2017 to a low of 4.8% in 2019, followed by a steady increase reaching 6.62% by 2022, indicating fluctuations in credit sales or collection efficiency. Inventories as a percentage of total assets declined from 5.43% to around 3.9% in 2019-2020 before gradually increasing to 5.27% in 2022, which could reflect changes in inventory management or demand forecasts.
The aggregate current assets as a percentage of total assets saw a substantial drop from 40.65% in 2018 to a low near 12% in 2019 and stabilized in the 13-15% range by 2022, signaling a sizable reallocation from current to long-term assets over this interval.
Long-term Asset Allocation
Net property, plant, and equipment decreased notably from 9.3% in 2018 to around 5% in 2019 and 2020, followed by a modest recovery to nearly 6% in 2022, suggesting capital expenditure reductions followed by cautious reinvestment or asset revaluation.
Goodwill and intangible assets have been dominant and somewhat divergent in their trends. Goodwill as a portion of total assets increased steadily from 27.84% in 2018 to 41.2% in 2022, pointing to possible acquisitions or reclassifications enhancing intangible value. Conversely, net intangible assets peaked in 2019 at 36.43% but declined continuously thereafter to 24.96% in 2022, indicating amortization or impairment impacts.
Long-term deferred tax assets showed a consistent upward trend from 0.9% in 2017 to over 11% in 2022, which may reflect growing deferred tax benefits or timing differences in tax recognition.
The portion represented by other assets was relatively minor but increased modestly over time, from 0.98% to 1.64%, indicating incremental diversification in asset holdings.
Overall, long-term assets accounted for the majority share, increasing from 59.35% in 2018 and reaching above 84% in later years, which confirms a strategic focus on non-current assets.
Summary Insight
The data points to a strategic transition from more liquid and short-term investments toward substantial growth in long-term assets, particularly goodwill, signaling expansion through acquisitions or increased valuation of intangible resources. Concurrently, the reduction in current assets and liquidity ratios implies a more asset-intensive structure with less immediate cash available relative to the total asset base. The rising deferred tax assets may indicate complex tax management strategies aligned with this longer-term asset growth. These shifts collectively suggest a company focusing on long-term value creation, potentially at the expense of short-term liquidity.