Monolithic Power Systems Inc (MPWR)

Fixed asset turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Revenue	US$ in thousands	2,207,100	1,821,070	1,794,150	1,207,800	844,452
Property, plant and equipment	US$ in thousands	494,945	368,952	357,157	362,962	281,528
Fixed asset turnover		4.46	4.94	5.02	3.33	3.00

December 31, 2024 calculation

Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $2,207,100K ÷ $494,945K
= 4.46

Fixed asset turnover is a financial ratio that measures a company's efficiency in generating sales revenue from its investment in fixed assets. Monolithic Power Systems Inc's fixed asset turnover has shown an increasing trend over the past five years, starting at 3.00 in December 31, 2020, and reaching 4.46 by December 31, 2024.

This improvement in fixed asset turnover indicates that the company has been able to utilize its fixed assets more effectively to generate sales over time. The ratio of 4.46 for December 31, 2024, means that for every dollar invested in fixed assets, Monolithic Power Systems Inc generated $4.46 in sales revenue during that year.

A higher fixed asset turnover ratio is generally favorable as it signals better asset utilization and operational efficiency. However, it is essential to consider industry norms and company-specific factors when evaluating the significance of this ratio. Overall, the increasing trend in Monolithic Power Systems Inc's fixed asset turnover reflects positively on its operational performance and efficiency in utilizing its fixed assets to drive sales growth.