Monolithic Power Systems Inc (MPWR)

Operating return on assets (Operating ROA)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Operating income	US$ in thousands	539,358	481,736	526,785	262,417	158,882
Total assets	US$ in thousands	3,617,100	2,434,350	2,058,880	1,585,820	1,208,490
Operating ROA		14.91%	19.79%	25.59%	16.55%	13.15%

December 31, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $539,358K ÷ $3,617,100K
= 14.91%

Operating return on assets (Operating ROA) is a key measure of profitability that indicates how efficiently Monolithic Power Systems Inc is utilizing its assets to generate operating income.

The trend analysis of Monolithic Power Systems Inc's Operating ROA from December 31, 2020, to December 31, 2024, reveals fluctuations in the company's asset efficiency and operating performance.

- In December 31, 2020, the Operating ROA stood at 13.15%, indicating that the company generated $0.1315 in operating income for every dollar of assets employed.
- By December 31, 2021, the Operating ROA improved to 16.55%, suggesting an enhancement in asset productivity and operating efficiency.
- The trend continued to rise significantly by December 31, 2022, reaching 25.59%, showcasing a substantial increase in profitability and effective asset utilization.
- However, the Operating ROA dipped to 19.79% by December 31, 2023, which could be attributed to various factors impacting the company's operating performance and asset management.
- Finally, by December 31, 2024, the Operating ROA decreased further to 14.91%, indicating a decline in asset efficiency and operating profitability compared to the previous year.

Overall, while Monolithic Power Systems Inc experienced fluctuations in Operating ROA during the period under review, an upward trend was observed until 2022, followed by a slight decline in subsequent years. It is essential for the company to closely monitor its asset utilization and operating performance to sustain and enhance profitability in the future.