Monolithic Power Systems Inc (MPWR)

Working capital turnover

		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	Dec 31, 2019	Sep 30, 2019	Mar 31, 2019	Dec 31, 2018
Revenue (ttm)	US$ in thousands	1,821,072	1,827,072	1,847,623	1,867,499	1,794,148	1,670,640	1,498,744	1,331,057	1,207,798	1,104,337	1,040,237	933,129	844,452	778,147	687,538	642,692	630,411	623,648	594,596	582,383
Total current assets	US$ in thousands	1,819,500	1,735,380	1,632,350	1,622,630	1,410,620	1,323,460	1,332,090	1,247,140	1,124,850	1,064,490	950,080	922,430	841,998	819,143	748,864	704,785	655,206	629,295	574,085	580,810
Total current liabilities	US$ in thousands	235,035	250,018	250,841	315,843	263,400	290,988	254,487	272,528	226,944	227,663	182,731	187,909	146,969	158,278	136,785	112,495	98,225	105,026	91,576	80,439
Working capital turnover		1.15	1.23	1.34	1.43	1.56	1.62	1.39	1.37	1.35	1.32	1.36	1.27	1.21	1.18	1.12	1.09	1.13	1.19	1.23	1.16

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $1,821,072K ÷ ($1,819,500K – $235,035K)
= 1.15

Based on the data provided, Monolithic Power System Inc's working capital turnover has been fluctuating over the past eight quarters. The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate sales revenue.

The trend in Monolithic Power System Inc's working capital turnover shows a general decline from Q4 2022 to Q1 2023, followed by a slight increase in the subsequent quarters. The ratio peaked at 1.56 in Q4 2022 and has since decreased to 1.37 in Q1 2022 before gradually rising to 1.43 in Q1 2023.

A working capital turnover ratio of less than 1 suggests that the company is holding excess working capital, which may indicate inefficient use of resources. Conversely, a ratio greater than 1 indicates efficient utilization of working capital to generate sales.

Monolithic Power System Inc's working capital turnover ratios over the past eight quarters indicate a relatively stable performance, with values consistently above 1. However, the slight decline in the ratio from Q4 2022 to Q1 2023 may warrant further investigation into the company's working capital management practices to ensure optimal efficiency in utilizing its resources.