Monolithic Power Systems Inc (MPWR)

Payables 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
Payables	US$ in thousands	102,526	62,958	61,461	83,027	38,169
Payables turnover		9.62	12.71	12.13	6.29	9.92

December 31, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $986,230K ÷ $102,526K
= 9.62

The payables turnover ratio for Monolithic Power Systems Inc has varied over the years, reflecting the company's efficiency in managing its accounts payable.

In 2020, the payables turnover ratio was 9.92, indicating that the company was able to turn over its accounts payable almost 10 times during the year. This suggests a relatively efficient management of its payables.

However, in 2021, the payables turnover decreased to 6.29, which may suggest that the company took longer to pay its suppliers compared to the previous year. This could be due to various factors such as changes in payment terms or cash flow constraints.

The ratio improved significantly in 2022, reaching 12.13, and continued to increase in 2023 to 12.71. These higher figures imply that the company was able to pay off its accounts payable more frequently during these years, indicating an improved efficiency in managing its payables.

By 2024, the payables turnover ratio decreased slightly to 9.62, but it still remained within a range that suggests effective management of accounts payable.

Overall, fluctuations in the payables turnover ratio can provide insights into how efficiently Monolithic Power Systems Inc is managing its payables and its relationships with suppliers. It is important for the company to continually monitor and optimize its accounts payable processes to maintain healthy financial operations.