Monolithic Power Systems Inc (MPWR)

Receivables 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
Receivables	US$ in thousands	232,518	229,858	191,466	110,240	68,757
Receivables turnover		9.49	7.92	9.37	10.96	12.28

December 31, 2024 calculation

Receivables turnover = Revenue ÷ Receivables
= $2,207,100K ÷ $232,518K
= 9.49

The receivables turnover for Monolithic Power Systems Inc has been showing a declining trend over the past five years. In December 31, 2020, the receivables turnover was at 12.28, indicating that the company was collecting its accounts receivable approximately 12 times over the year. However, by December 31, 2024, the receivables turnover ratio had decreased to 9.49, suggesting that the company was collecting its receivables less frequently.

A decreasing trend in receivables turnover could signal potential issues with collecting accounts receivable efficiently. It may indicate that the company is extending credit to customers with lower creditworthiness or facing delays in collecting payments. A lower turnover ratio also implies that the company is tying up more resources in accounts receivable, potentially impacting its cash flow and liquidity.

Further analysis of the reasons behind the decreasing receivables turnover ratio is necessary to understand the implications for Monolithic Power Systems Inc's financial performance and operational efficiency.