Monolithic Power Systems Inc (MPWR)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	986,230	799,953	745,596	522,339	378,498
Inventory	US$ in thousands	419,611	383,702	447,290	259,417	157,062
Inventory turnover		2.35	2.08	1.67	2.01	2.41

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $986,230K ÷ $419,611K
= 2.35

Inventory turnover represents how efficiently a company manages its inventory by showing how many times a company sells and replaces its inventory during a specific period. Looking at the data for Monolithic Power Systems Inc over the years:

1. In December 31, 2020, the inventory turnover was 2.41, indicating that the company turned over its inventory approximately 2.41 times during that period.
2. By December 31, 2021, the inventory turnover decreased to 2.01, suggesting a slight decrease in the efficiency of managing inventory.
3. The trend continued in December 31, 2022, with the inventory turnover decreasing further to 1.67, indicating a lower rate of inventory turnover.
4. However, by December 31, 2023, the inventory turnover improved to 2.08, showing a positive reversal in managing inventory efficiency.
5. In the most recent year, December 31, 2024, the inventory turnover further increased to 2.35, indicating an improved efficiency in handling inventory turnover.

Overall, despite fluctuations in inventory turnover over the years, Monolithic Power Systems Inc has shown some variation in managing its inventory efficiently, with a general trend towards improvement in recent years. Monitoring this ratio can provide insights into the company's operational efficiency and inventory management practices.