Balance Sheet: Liabilities and Stockholders’ Equity

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.

Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.

Microchip Technology Inc., consolidated balance sheet: liabilities and stockholders’ equity

US$ in thousands

	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018	Mar 31, 2017
Accounts payable	344,700)	292,400)	246,800)	226,400)	144,100)	149,233)
Accrued compensation and benefits	213,700)	166,700)	137,500)	133,200)	87,600)	—)
Income taxes payable	121,500)	43,400)	38,000)	46,900)	27,500)	—)
Sales related reserves	408,100)	350,700)	353,000)	366,900)	—)	—)
Current portion of operating lease liabilities	33,800)	39,800)	44,500)	—)	—)	—)
Accrued expenses and other liabilities	277,200)	193,700)	208,800)	240,300)	114,500)	212,450)
Accrued liabilities	1,054,300)	794,300)	781,800)	787,300)	229,600)	212,450)
Deferred income on shipments to distributors	—)	—)	—)	—)	333,800)	292,815)
Current portion of long-term debt	—)	1,322,900)	608,800)	1,360,800)	1,309,900)	49,952)
Current liabilities	1,399,000)	2,409,600)	1,637,400)	2,374,500)	2,017,400)	704,450)
Long-term debt excluding current maturities	7,687,400)	7,581,200)	8,873,400)	8,946,200)	1,758,400)	2,900,524)
Long-term income tax payable	704,600)	689,900)	668,400)	756,200)	754,900)	184,945)
Long-term deferred tax liability	39,800)	43,900)	318,500)	706,100)	205,800)	409,045)
Other long-term liabilities	473,900)	417,100)	342,900)	279,500)	240,900)	217,206)
Long-term liabilities	8,905,700)	8,732,100)	10,203,200)	10,688,000)	2,960,000)	3,711,720)
Total liabilities	10,304,700)	11,141,700)	11,840,600)	13,062,500)	4,977,400)	4,416,170)
Preferred stock, $0.001 par value; no shares issued or outstanding	—)	—)	—)	—)	—)	—)
Common stock, $0.001 par value	600)	300)	200)	200)	200)	229)
Additional paid-in capital	2,535,900)	2,403,300)	2,675,100)	2,679,600)	2,562,500)	2,537,344)
Common stock held in treasury	(796,300)	(433,800)	(500,600)	(582,200)	(662,600)	(731,884)
Accumulated other comprehensive loss	(20,600)	(26,200)	(21,600)	(20,700)	(17,600)	(14,378)
Retained earnings	4,175,200)	3,393,500)	3,432,400)	3,210,600)	1,397,300)	1,479,400)
Stockholders’ equity	5,894,800)	5,337,100)	5,585,500)	5,287,500)	3,279,800)	3,270,711)
Total liabilities and stockholders’ equity	16,199,500)	16,478,800)	17,426,100)	18,350,000)	8,257,200)	7,686,881)

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).

Liabilities Trends

Total liabilities demonstrate a general upward trend from 4.4 billion USD in 2017 to a peak of approximately 13.1 billion USD in 2019, after which there is a decline to about 10.3 billion USD by 2022. This pattern suggests significant growth in liabilities up to 2019, followed by a gradual reduction.

Current liabilities rose sharply from 704 million USD in 2017 to over 2.37 billion USD in 2019, then fluctuated, decreasing significantly to approximately 1.4 billion USD by 2022. This indicates a concentration of liabilities shifting from short-term obligations post-2019.

Long-term liabilities, excluding current maturities, increased markedly from 2.9 billion USD in 2017 to an apex of 8.9 billion USD in 2019, followed by a slight decline but remaining elevated near 7.7 billion USD in 2022, showing sustained long-term debt levels.

Accounts payable grew steadily from 149 million USD in 2017 to 345 million USD by 2022, reflecting increased operational payables over time.

Accrued compensation and benefits increased consistently from 87.6 million USD in 2018 to 213.7 million USD in 2022, highlighting a rise in employee-related liabilities.

Income taxes payable display variability, rising notably from 27.5 million USD in 2018 to a significant 121.5 million USD in 2022, suggesting fluctuating tax obligations.

Sales related reserves, reported from 2019 onwards, remained relatively stable around 350 million USD, peaking at 408 million USD in 2022.

Accrued expenses and other liabilities exhibit fluctuations, with a drop in 2018, a peak in 2019, and a rise again in 2022 to 277 million USD, indicating variable operational liabilities.

Stockholders’ Equity and Capital Structure

Stockholders’ equity expanded from approximately 3.27 billion USD in 2017 to 5.89 billion USD in 2022, reflecting overall growth in net assets.

Retained earnings increased significantly from 1.48 billion USD in 2017 to over 4.17 billion USD in 2022, which points to accumulated profitability and reinvestment.

Additional paid-in capital remained relatively stable, fluctuating slightly around 2.5 billion USD across the years, indicating limited new equity issuance.

Common stock par value showed marginal increases, while common stock held in treasury decreased substantially from a negative 731 million USD in 2017 to a more negative 796 million USD in 2022, reflecting ongoing treasury stock transactions.

Accumulated other comprehensive loss increased in absolute terms initially, reaching -26 million USD in 2021 before slightly improving to -20.6 million USD in 2022, denoting fluctuating unrealized losses.

Insight Summary

The financial data reflects a company that experienced significant growth in liabilities particularly between 2017 and 2019, with a peak in both current and long-term liabilities. Post-2019, liabilities declined, especially in current liabilities, which may indicate improved working capital management or debt restructuring.

Equity components grew consistently, with retained earnings showing notable accumulation, supporting strengthening shareholder equity. The negative treasury stock values increased, suggesting increased repurchase activity or stock buybacks.

Overall, the data suggests expansion followed by consolidation of debts, alongside steady growth in equity and profitability as measured by retained earnings. The shifting profile of liabilities combined with strengthening equity indicates evolving financial strategy or responses to market conditions over the analyzed periods.

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Microchip Technology Inc. (NASDAQ:MCHP)

Balance Sheet: Liabilities and Stockholders’ Equity