Goodwill and Intangible Asset Disclosure
Adjustments to Financial Statements: Removal of Goodwill
Adjusted Financial Ratios: Removal of Goodwill (Summary)
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Microchip Technology Inc., balance sheet: goodwill and intangible assets

US$ in thousands

	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018	Mar 31, 2017
Core and developed technology	7,390,200)	7,371,300)	7,331,900)	7,413,000)	1,952,300)	1,932,329)
Customer-related	200,300)	835,200)	903,600)	917,100)	716,900)	716,945)
In-process research and development	6,400)	7,700)	8,800)	7,700)	12,100)	38,511)
Software licenses	191,200)	124,600)	—)	—)	—)	—)
Distribution rights and other	400)	5,600)	126,000)	7,600)	1,800)	18,727)
Intangible assets, gross amount	7,788,500)	8,344,400)	8,370,300)	8,345,400)	2,683,100)	2,706,512)
Accumulated amortization	(3,745,400)	(3,549,600)	(2,668,000)	(1,659,800)	(1,021,100)	(558,420)
Intangible assets, net amount	4,043,100)	4,794,800)	5,702,300)	6,685,600)	1,662,000)	2,148,092)
Goodwill	6,673,600)	6,670,600)	6,664,800)	6,663,900)	2,299,000)	2,299,009)
Intangible assets and goodwill	10,716,700)	11,465,400)	12,367,100)	13,349,500)	3,961,000)	4,447,101)

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).

Download chart

Item	Description	The company
Intangible assets, net amount	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Microchip Technology Inc. intangible assets, net amount decreased from 2020 to 2021 and from 2021 to 2022.
Goodwill	Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.	Microchip Technology Inc. goodwill increased from 2020 to 2021 and from 2021 to 2022.
Intangible assets and goodwill	Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Microchip Technology Inc. intangible assets and goodwill decreased from 2020 to 2021 and from 2021 to 2022.

Microchip Technology Inc., adjustments to financial statements

US$ in thousands

	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018	Mar 31, 2017
Adjustment to Total Assets
Total assets (as reported)	16,199,500)	16,478,800)	17,426,100)	18,350,000)	8,257,200)	7,686,881)
Less: Goodwill	6,673,600)	6,670,600)	6,664,800)	6,663,900)	2,299,000)	2,299,009)
Total assets (adjusted)	9,525,900)	9,808,200)	10,761,300)	11,686,100)	5,958,200)	5,387,872)
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported)	5,894,800)	5,337,100)	5,585,500)	5,287,500)	3,279,800)	3,270,711)
Less: Goodwill	6,673,600)	6,670,600)	6,664,800)	6,663,900)	2,299,000)	2,299,009)
Stockholders’ equity (adjusted)	(778,800)	(1,333,500)	(1,079,300)	(1,376,400)	980,800)	971,702)

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).

Microchip Technology Inc., Financial Data: Reported vs. Adjusted

Download chart

Microchip Technology Inc., adjusted financial ratios

	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018	Mar 31, 2017
Total Asset Turnover
Reported total asset turnover	0.42	0.33	0.30	0.29	0.48	0.44
Adjusted total asset turnover	0.72	0.55	0.49	0.46	0.67	0.63
Financial Leverage
Reported financial leverage	2.75	3.09	3.12	3.47	2.52	2.35
Adjusted financial leverage	—	—	—	—	6.07	5.54
Return on Equity (ROE)
Reported ROE	21.81%	6.55%	10.22%	6.73%	7.79%	5.03%
Adjusted ROE	—	—	—	—	26.04%	16.94%
Return on Assets (ROA)
Reported ROA	7.94%	2.12%	3.27%	1.94%	3.09%	2.14%
Adjusted ROA	13.49%	3.56%	5.30%	3.05%	4.29%	3.06%

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).

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Microchip Technology Inc. adjusted total asset turnover ratio improved from 2020 to 2021 and from 2021 to 2022.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Microchip Technology Inc. adjusted ROA deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.

Microchip Technology Inc., Financial Ratios: Reported vs. Adjusted

Download chart

	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018	Mar 31, 2017
As Reported
Selected Financial Data (US$ in thousands)
Net sales	6,820,900)	5,438,400)	5,274,200)	5,349,500)	3,980,800)	3,407,807)
Total assets	16,199,500)	16,478,800)	17,426,100)	18,350,000)	8,257,200)	7,686,881)
Activity Ratio
Total asset turnover¹	0.42	0.33	0.30	0.29	0.48	0.44
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net sales	6,820,900)	5,438,400)	5,274,200)	5,349,500)	3,980,800)	3,407,807)
Adjusted total assets	9,525,900)	9,808,200)	10,761,300)	11,686,100)	5,958,200)	5,387,872)
Activity Ratio
Adjusted total asset turnover²	0.72	0.55	0.49	0.46	0.67	0.63

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).

2022 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= 6,820,900 ÷ 16,199,500 = 0.42

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 6,820,900 ÷ 9,525,900 = 0.72

Download chart

Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Microchip Technology Inc. adjusted total asset turnover ratio improved from 2020 to 2021 and from 2021 to 2022.

	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018	Mar 31, 2017
As Reported
Selected Financial Data (US$ in thousands)
Total assets	16,199,500)	16,478,800)	17,426,100)	18,350,000)	8,257,200)	7,686,881)
Stockholders’ equity	5,894,800)	5,337,100)	5,585,500)	5,287,500)	3,279,800)	3,270,711)
Solvency Ratio
Financial leverage¹	2.75	3.09	3.12	3.47	2.52	2.35
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted total assets	9,525,900)	9,808,200)	10,761,300)	11,686,100)	5,958,200)	5,387,872)
Adjusted stockholders’ equity	(778,800)	(1,333,500)	(1,079,300)	(1,376,400)	980,800)	971,702)
Solvency Ratio
Adjusted financial leverage²	—	—	—	—	6.07	5.54

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).

2022 Calculations

¹ Financial leverage = Total assets ÷ Stockholders’ equity
= 16,199,500 ÷ 5,894,800 = 2.75

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 9,525,900 ÷ -778,800 = —

Download chart

	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018	Mar 31, 2017
As Reported
Selected Financial Data (US$ in thousands)
Net income	1,285,500)	349,400)	570,600)	355,900)	255,400)	164,639)
Stockholders’ equity	5,894,800)	5,337,100)	5,585,500)	5,287,500)	3,279,800)	3,270,711)
Profitability Ratio
ROE¹	21.81%	6.55%	10.22%	6.73%	7.79%	5.03%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income	1,285,500)	349,400)	570,600)	355,900)	255,400)	164,639)
Adjusted stockholders’ equity	(778,800)	(1,333,500)	(1,079,300)	(1,376,400)	980,800)	971,702)
Profitability Ratio
Adjusted ROE²	—	—	—	—	26.04%	16.94%

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).

2022 Calculations

¹ ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 1,285,500 ÷ 5,894,800 = 21.81%

² Adjusted ROE = 100 × Net income ÷ Adjusted stockholders’ equity
= 100 × 1,285,500 ÷ -778,800 = —

Download chart

	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018	Mar 31, 2017
As Reported
Selected Financial Data (US$ in thousands)
Net income	1,285,500)	349,400)	570,600)	355,900)	255,400)	164,639)
Total assets	16,199,500)	16,478,800)	17,426,100)	18,350,000)	8,257,200)	7,686,881)
Profitability Ratio
ROA¹	7.94%	2.12%	3.27%	1.94%	3.09%	2.14%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income	1,285,500)	349,400)	570,600)	355,900)	255,400)	164,639)
Adjusted total assets	9,525,900)	9,808,200)	10,761,300)	11,686,100)	5,958,200)	5,387,872)
Profitability Ratio
Adjusted ROA²	13.49%	3.56%	5.30%	3.05%	4.29%	3.06%

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).

2022 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 1,285,500 ÷ 16,199,500 = 7.94%

² Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 1,285,500 ÷ 9,525,900 = 13.49%

Download chart

Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Microchip Technology Inc. adjusted ROA deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.

Microchip Technology Inc. (NASDAQ:MCHP)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

Microchip Technology Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Microchip Technology Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)