Microchip Technology Incorporat — Earnings Quality Grade F
MCHP · Technology
Major red flags
Screening Summary
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 57 days, change +2 days YoY
AR growth -40.1% vs revenue growth -42.3%
Revenue -42.3%, CFFO -69.0%. Cash follows revenue
Expense Quality
Inventory growth -1.7% exceeds COGS -26.7%
CapEx growth -55.8% vs revenue -42.3%. Normal
SG&A/Gross Profit = 25.0%, excellent (<30%)
Gross margin swung -9.4pp (65.4% → 56.1%)
Cash Flow Quality
CFFO/NI = -1796.20. Below 1.0
FCF $0.8B, FCF/NI = -1544.20
Accruals ratio = -5.8%. Low accruals
Cash $0.8B covers only 14% of debt $5.7B
Balance Sheet Health
Goodwill+Intangibles $9.1B = 128% of equity. Over 50%
Debt/EBITDA = 5.4x (>4x). Interest coverage = 1.5x (<2x). Financial stress
Other assets -35.0% vs revenue -42.3%. Normal
No write-off data
Acquisition Risk
FCF after acquisitions positive
Goodwill+Intangibles change -4% YoY. Normal
Manipulation Score
M-Score = -3.06 (< -2.22). Unlikely manipulator
Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-10