Balance Sheet: Assets
The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.
Assets are resources controlled by the company as a result of past events and from which future economic benefits are expected to flow to the entity.
Microchip Technology Inc., consolidated balance sheet: assets
US$ in thousands
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 and shifts over the examined periods.
- Liquidity and Current Assets
- Cash and cash equivalents exhibited a declining trend from US$908,684 thousand in 2017 to US$280,000 thousand in 2021, with a slight recovery to US$317,400 thousand in 2022. Short-term investments showed a sharp decrease from US$1,295,300 thousand in 2018 to merely US$2,000 thousand from 2019 onwards, indicating a reduction in liquid investment holdings. Accounts receivable, net, consistently increased from US$478,373 thousand in 2017 to US$1,072,600 thousand in 2022, suggesting growing credit sales or extended collection periods. Inventories increased notably from US$417,202 thousand in 2017 to US$854,400 thousand in 2022, which might reflect increased production or stockpiling. Other current assets gradually rose from US$100,234 thousand in 2017 to US$206,200 thousand in 2022. Despite fluctuations in individual components, total current assets peaked at US$3,356,300 thousand in 2018 but generally declined afterward, ending at US$2,452,600 thousand in 2022.
- Property, Plant, and Equipment
- Net property, plant and equipment increased from US$683,338 thousand in 2017 to US$996,700 thousand in 2019, followed by a decline to US$854,700 thousand in 2021, and rebounded to US$967,900 thousand in 2022. This pattern suggests periods of investment followed by asset disposals or depreciation effects.
- Goodwill and Intangible Assets
- Goodwill showed a significant jump between 2018 and 2019, increasing from approximately US$2,299,000 thousand to nearly US$6,664,000 thousand, remaining relatively stable thereafter. Intangible assets, net, displayed a similar surge to a peak in 2019 at around US$6,685,600 thousand, but subsequently declined steadily to US$4,043,100 thousand by 2022. These fluctuations may denote acquisitions in 2019 followed by amortization or impairment over the following years.
- Deferred Taxes and Other Assets
- Long-term deferred tax assets increased markedly from US$68,870 thousand in 2017 to approximately US$1,797,100 thousand by 2022, indicating potential tax benefits from timing differences or losses carried forward. Other long-term assets grew from US$75,075 thousand to US$265,200 thousand over the period, with the most notable increase occurring between 2019 and 2020.
- Total Asset Base
- Total assets experienced rapid expansion from US$7,686,881 thousand in 2017 to a peak of US$18,350,000 thousand in 2019, driven primarily by the substantial increases in goodwill and intangible assets. However, total assets contracted gradually thereafter to US$16,199,500 thousand by 2022, reflecting the reductions in intangible assets and current assets noted previously.
Overall, the data indicate a period of aggressive growth and acquisition around 2019, as evidenced by sharp increases in goodwill and intangible assets. Subsequently, the company appears to have undergone asset revaluation, amortization, or impairment, leading to reductions in its intangible base and total assets. Liquidity metrics exhibit volatility with significant reductions in cash resources and short-term investments, while working capital components such as accounts receivable and inventories increased substantially. These patterns imply strategic adjustments in asset management and capital structure over the reviewed periods.