Microchip Technology (WBO:MCHP) ROCE % : 16.16% (As of Dec. 2023)

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What is Microchip Technology ROCE %?

ROCE % measures how well a company generates profits from its capital. It is calculated as EBIT divided by Capital Employed, where Capital Employed is calculated as Total Assets minus Total Current Liabilities. Microchip Technology's annualized ROCE % for the quarter that ended in Dec. 2023 was 16.16%.

Microchip Technology ROCE % Historical Data

The historical data trend for Microchip Technology's ROCE % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Microchip Technology ROCE % Chart

Microchip Technology Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

ROCE %

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6.37

4.02

4.37

12.42

22.46

Microchip Technology Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROCE %	Get a 7-Day Free Trial															22.37	24.27	26.78	26.76	16.16

Microchip Technology ROCE % Calculation

Microchip Technology's annualized ROCE % for the fiscal year that ended in Mar. 2023 is calculated as:

ROCE %	=	EBIT	/	( (Capital Employed	+	Capital Employed)	/ count )
		(A: Mar. 2023 )		(A: Mar. 2022 )		(A: Mar. 2023 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(A: Mar. 2023 )		(A: Mar. 2022 )		(A: Mar. 2023 )
	=	2899.229	/	( ( (14709.146 - 1270.292)	+	(15289.86 - 2912.772) )	/ 2 )
	=	2899.229	/	( (13438.854	+	12377.088)	/ 2 )
	=	2899.229	/	12907.971
	=	22.46 %

Microchip Technology's ROCE % of for the quarter that ended in Dec. 2023 is calculated as:

ROCE %	=	EBIT ⁽¹⁾	/	( (Capital Employed	+	Capital Employed)	/ count )
		(Q: Dec. 2023 )		(Q: Sep. 2023 )		(Q: Dec. 2023 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(Q: Dec. 2023 )		(Q: Sep. 2023 )		(Q: Dec. 2023 )
	=	1950.644	/	( ( (15555.512 - 3197.606)	+	(14803.131 - 3019.864) )	/ 2 )
	=	1950.644	/	( ( 12357.906	+	11783.267 )	/ 2 )
	=	1950.644	/	12070.5865
	=	16.16 %

(1) Note: The EBIT data used here is four times the quarterly (Dec. 2023) EBIT data.

Microchip Technology (WBO:MCHP) ROCE % Explanation

ROCE % can be especially useful when comparing the performance of capital-intensive companies. Unlike ROE %, which indicates the profitability of Shareholders Equity, ROCE % also considers long-term debt in Capital Employed. This can be helpful when analyzing companies with significant debt, as the result is neutralized by taking debt into consideration.

Generally speaking, a higher ROCE % indicates a stonger profitability for a company. Moreover, it is important to look at the ratio from a long term perspective. Investors tend to favor companies with stable and rising ROCE % trend over those with volatile ones.

Microchip Technology ROCE % Related Terms

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Microchip Technology (WBO:MCHP) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Semiconductors » Microchip Technology Inc (WBO:MCHP) » Definitions » ROCE %

Comparable Companies

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MCHP:USA 1MCHP:Italy MCP:Germany M1CH34:Brazil

Address

2355 West Chandler Boulevard, Chandler, AZ, USA, 85224-6199

Website

https://www.microchip.com

Microchip Technology became an independent company in 1989 when it was spun off from General Instrument. More than half of revenue comes from MCUs, which are used in a wide array of electronic devices from remote controls to garage door openers to power windows in autos. The company's strength lies in lower-end 8-bit MCUs that are suitable for a wider range of less technologically advanced devices, but the firm has expanded its presence in higher-end MCUs and analog chips as well.