Monolithic Power Systems Inc (MPWR)

Return on equity (ROE)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	US$ in thousands	427,374	437,672	242,023	164,375	108,839
Total stockholders’ equity	US$ in thousands	2,049,940	1,668,600	1,243,980	966,587	773,491
ROE		20.85%	26.23%	19.46%	17.01%	14.07%

December 31, 2023 calculation

ROE = Net income ÷ Total stockholders’ equity
= $427,374K ÷ $2,049,940K
= 20.85%

The Return on Equity (ROE) for Monolithic Power System Inc has shown a positive trend over the past five years, indicating the company's efficient utilization of shareholder equity to generate earnings. In 2023, the ROE decreased to 20.85% from 26.23% in 2022, but still remained at a healthy level. This implies that for every dollar of equity invested by shareholders, the company generated a return of approximately 20.85 cents in 2023.

Comparing the ROE figures across the years, it is evident that Monolithic Power System Inc has been consistently improving its efficiency in generating returns for shareholders. The ROE has increased steadily from 14.07% in 2019 to 20.85% in 2023, reflecting the company's efforts in enhancing profitability and maximizing shareholder value.

Overall, the trend in Monolithic Power System Inc's ROE indicates strong performance in terms of generating profits relative to the equity invested by shareholders. This suggests that the company is effectively leveraging its equity capital to drive growth and create value for its investors.