Microchip Technology Inc., current enterprise value calculation

Current share price (P)	$84.53
No. shares of common stock outstanding	547,795,897
US$ in thousands
Common equity (market value)¹	46,305,187)
Add: Preferred stock, $0.001 par value; no shares issued or outstanding (per books)	—)
Total equity	46,305,187)
Add: Current portion of long-term debt (per books)	—)
Add: Long-term debt excluding current maturities (per books)	7,687,400)
Total equity and debt	53,992,587)
Less: Cash and cash equivalents	317,400)
Less: Short-term investments	2,000)
Enterprise value (EV)	53,673,187)

Based on: 10-K (reporting date: 2022-03-31).

¹ Common equity (market value) = Share price × No. shares of common stock outstanding
= 84.53 × 547,795,897

Microchip Technology Inc., EV calculation

	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018	Mar 31, 2017
Share price^1, 2	$66.67	$71.22	$43.91	$40.67	$46.40	$41.26
No. shares of common stock outstanding¹	554,501,300	547,062,818	490,664,994	475,853,016	470,073,406	458,795,754
US$ in thousands
Common equity (market value)³	36,968,602)	38,961,814)	21,545,100)	19,352,942)	21,811,406)	18,929,913)
Add: Preferred stock, $0.001 par value; no shares issued or outstanding (book value)	—)	—)	—)	—)	—)	—)
Total equity	36,968,602)	38,961,814)	21,545,100)	19,352,942)	21,811,406)	18,929,913)
Add: Current portion of long-term debt (book value)	—)	1,322,900)	608,800)	1,360,800)	1,309,900)	49,952)
Add: Long-term debt excluding current maturities (book value)	7,687,400)	7,581,200)	8,873,400)	8,946,200)	1,758,400)	2,900,524)
Total equity and debt	44,656,002)	47,865,914)	31,027,300)	29,659,942)	24,879,706)	21,880,389)
Less: Cash and cash equivalents	317,400)	280,000)	401,000)	428,600)	901,300)	908,684)
Less: Short-term investments	2,000)	2,000)	2,000)	2,300)	1,295,300)	394,088)
Enterprise value (EV)	44,336,602)	47,583,914)	30,624,300)	29,229,042)	22,683,106)	20,577,617)

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).

¹ Data adjusted for splits and stock dividends.

² Closing price as at the filing date of Microchip Technology Inc. Annual Report.

³ 2022 Calculation
Common equity (market value) = Share price × No. shares of common stock outstanding
= 66.67 × 554,501,300

The financial trajectory between March 31, 2017, and March 31, 2022, is characterized by a significant expansion in valuation, punctuated by a substantial surge in 2021 followed by a slight correction in 2022. The overall growth in Enterprise Value (EV) reflects both an increase in market capitalization and shifts in the underlying capital structure.

Market Equity Trends: Common equity market value exhibited moderate volatility in the early period, increasing from approximately 18.9 billion USD in 2017 to 21.8 billion USD in 2018, before experiencing a contraction to 19.4 billion USD in 2019. A period of rapid appreciation occurred between 2020 and 2021, where market value climbed from 21.5 billion USD to 39.0 billion USD, representing a nearly 81% increase within a single fiscal year. This peak was followed by a slight decline to 37.0 billion USD by March 2022.
Enterprise Value Evolution: Enterprise Value maintained a consistent upward trend from 2017 through 2021. Starting at 20.6 billion USD, EV rose steadily to 29.2 billion USD by 2019 and 30.6 billion USD by 2020. The most aggressive growth phase mirrored the equity surge in 2021, reaching a peak of 47.6 billion USD. Similar to the market equity, the EV retracted to 44.3 billion USD in 2022, indicating a general cooling of the valuation after the 2021 spike.
Capital Structure and Leverage: A persistent gap is observed between common equity market value and the total equity and debt figure, confirming the presence of net debt. Notably, between 2018 and 2019, while market equity decreased, both total equity and debt and the Enterprise Value increased. This divergence suggests a strategic increase in leverage or debt obligations during that period. The total equity and debt peaked in 2021 at 47.9 billion USD, closely aligning with the Enterprise Value of 47.6 billion USD, which suggests that the valuation is heavily influenced by the combined weight of debt and market capitalization.

In summary, the data indicates a period of aggressive valuation growth driven largely by market equity expansion in 2021, supported by a capital structure that incorporates substantial debt. The convergence and subsequent slight decline in all valuation metrics in 2022 suggest a stabilization following an exceptional period of growth.

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Microchip Technology Inc. (NASDAQ:MCHP)

Enterprise Value (EV)

Current Enterprise Value (EV)

Historical Enterprise Value (EV)