Cash Flow Statement
Quarterly Data
The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.
The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.
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- Analysis of Profitability Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Return on Equity (ROE) since 2005
- Total Asset Turnover since 2005
- Price to Sales (P/S) since 2005
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Microchip Technology Inc., consolidated cash flow statement (quarterly data)
US$ in thousands
Based on: 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-K (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-K (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-K (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-K (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-K (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-K (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30).
- Net Income (Loss)
- The net income shows considerable variability over the reviewed quarters, ranging from a significant loss of approximately $251 million in December 2017 to a peak profit of $580 million in December 2022. Notably, the periods following major acquisition events exhibit fluctuations with some quarters reverting to losses, followed by substantial recoveries. Overall, there is a positive trend in net income in the latest quarters, suggesting improving profitability.
- Depreciation and Amortization
- Depreciation and amortization expenses steadily increased from around $113 million in mid-2016 to levels exceeding $300 million in late 2019 and early 2020, then slightly declined but remained consistently high in subsequent periods. This trend likely reflects capital investments and amortization related to acquisitions and intangible assets.
- Deferred Income Taxes
- Deferred income taxes exhibit volatility, with substantial swings between positive and negative values across quarters. Some abrupt changes align temporally with net income fluctuations, potentially indicating tax asset or liability adjustments, possibly linked to acquisition-related tax treatments.
- Share-Based Compensation Expense
- Share-based compensation expense maintains a generally upward trajectory, increasing from approximately $22 million in late 2016 to around $55 million by mid-2021, stabilizing thereafter. This points to increased equity incentive plan costs over time, which may reflect workforce growth or changes in compensation policies.
- Loss on Settlement of Debt
- Periods of debt settlement losses occur intermittently, notably with a large charge of $142 million in December 2020. These losses indicate restructuring or early repayment costs, which may relate to refinancing activities or managing debt post-acquisition.
- Amortization of Debt Discount and Debt Issuance Costs
- Both metrics show consistent amortization expenses across the quarters, with gradual decreases noted in later years. This steady pattern suggests ongoing costs associated with issued debt instruments, balancing amortization schedules with new debt issuance.
- Other Non-Cash Adjustments
- This line item fluctuates significantly, showing both positive and negative values without a clear trend. Such variation indicates diverse non-cash accounting adjustments affecting operating cash flow reconciliation.
- Changes in Working Capital (Accounts Receivable, Inventories, Payables, and Other Assets/Liabilities)
- Working capital components demonstrate marked variability. Accounts receivable changes alternate between increases and decreases, indicative of fluctuating sales collection timings. Inventories increased substantially in late 2018 and 2019 before declining steeply in 2022 and 2023, reflecting inventory management adjustments. Accounts payable and accrued liabilities also fluctuate widely, with some quarters showing sharp increases, possibly due to supplier payment timing. Overall, working capital changes are significant drivers of cash flow volatility.
- Net Cash Provided by Operating Activities
- Operating cash flow reveals a strong upward momentum overall. Initial quarters in 2016-2017 show values around $200-$350 million, evolving into much higher inflows exceeding $1 billion by 2023. This trend suggests enhanced operational efficiency and cash generation capacity over time.
- Capital Expenditures and Investments
- Capital expenditures exhibit variable but generally high outflows, with peaks of $89 million in late 2018 and above $140 million in late 2022, reflecting ongoing investments in property, plant, and equipment. Purchases of available-for-sale investments present notable one-time large purchases around 2017-2018, with substantial maturities and sales interspersed. These activities may be part of treasury management strategies alongside acquisitions.
- Investing Cash Flows
- Net cash used in investing consistently shows large outflows, especially in quarters associated with major acquisitions such as Atmel in mid-2016 and Microsemi in early 2018, where outflows reach several billion dollars. Apart from acquisitions, investing outflows remain significant but more moderate, supporting capital expenditures and other investments.
- Financing Activities
- Financing cash flows are volatile with substantial inflows primarily due to borrowings on credit facilities, senior notes issuance, and capital raising activities. Concurrently, there are large repayments of debt and repurchase of common stock in later years, particularly from 2020 onward, reflecting active capital structure management. Dividends show a steady increase in cash outflows across the analyzed periods, consistent with shareholder return policies.
- Cash and Cash Equivalents Movement
- The net change in cash fluctuates considerably, with significant decreases spanning hundreds of millions to over a billion dollars in some quarters linked to investing or financing outflows, especially around acquisition periods. Conversely, periods of positive cash flow correspond with strong operating cash inflows and financing inflows. Overall, the company's cash position appears to be actively managed with large swings reflective of operational and strategic financing activities.
- Summary of Financial Position Trends
- The data illustrates a company undergoing significant growth and transformation through acquisitions, reflected in elevated capital expenditures and investing outflows, along with fluctuating income and expenses related to debt management and amortization. Operational cash flows demonstrate strengthening over time, supporting the company’s ability to fund investing activities and service debt. The management's active debt refinancing, equity compensation, and share repurchase programs indicate strategic financial planning aimed at balancing growth investments and shareholder returns.