Monolithic Power Systems Inc (MPWR)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 539,358 | 481,736 | 526,785 | 262,417 | 158,882 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 3,145,770 | 2,049,940 | 1,668,600 | 1,243,980 | 966,587 |
| Return on total capital | 17.15% | 23.50% | 31.57% | 21.09% | 16.44% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $539,358K ÷ ($—K + $3,145,770K)
= 17.15%
Monolithic Power Systems Inc has shown a positive trend in its return on total capital over the past five years, ranging from 16.44% in December 2020 to 17.15% in December 2024. The company experienced a significant improvement in its return on total capital from 2020 to 2022, reaching 31.57% in December 2022, indicating effective capital management and utilization. However, there was a slight decline in 2023 to 23.50%. Overall, the company has maintained a healthy return on total capital, demonstrating its ability to generate profits relative to the total capital employed in its operations, although there was a slight dip in 2024. The management should continue monitoring this ratio to ensure efficient use of capital resources and sustained profitability.
Peer comparison
Dec 31, 2024