Monolithic Power Systems Inc (MPWR)

Payables turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Cost of revenue (ttm)	US$ in thousands	986,230	911,862	846,512	813,112	799,953	789,267	782,457	779,047	745,596	696,023	628,718	567,777	522,339	483,878	463,049	417,563	378,498	349,131	308,404	288,145
Payables	US$ in thousands	102,526	115,865	99,894	103,471	62,958	64,707	70,614	58,001	61,461	78,673	77,925	71,572	83,027	72,092	58,882	57,235	38,169	48,142	45,169	37,752
Payables turnover		9.62	7.87	8.47	7.86	12.71	12.20	11.08	13.43	12.13	8.85	8.07	7.93	6.29	6.71	7.86	7.30	9.92	7.25	6.83	7.63

December 31, 2024 calculation

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

Monolithic Power Systems Inc's payables turnover ratio has fluctuated over the period from March 31, 2020, to December 31, 2024. The payables turnover ratio indicates the number of times a company pays off its accounts payable during a specific period.

From the data provided, we observe that the payables turnover ratio ranged from a low of 6.29 on December 31, 2021, to a high of 13.43 on March 31, 2023. Generally, a higher payables turnover ratio suggests that the company is more efficient in paying off its creditors.

The company's payables turnover ratio peaked in the first quarter of 2023 before experiencing a decline in the subsequent quarters. This could indicate changes in the company's payment terms with suppliers or fluctuations in purchasing patterns.

It is crucial for stakeholders to monitor the payables turnover ratio as it provides insights into the efficiency of the company's cash management and relationships with suppliers. Analyzing trends in the payables turnover ratio can help identify potential liquidity issues or working capital management improvements.