Monolithic Power Systems Inc (MPWR)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 481,736 | 526,785 | 262,417 | 158,882 | 102,562 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 2,049,940 | 1,668,600 | 1,243,980 | 966,587 | 773,491 |
| Return on total capital | 23.50% | 31.57% | 21.09% | 16.44% | 13.26% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $481,736K ÷ ($—K + $2,049,940K)
= 23.50%
The return on total capital of Monolithic Power System Inc has shown a fluctuating trend over the past five years. The ratio stood at 23.50% in 2023, showing a decrease from 32.05% in 2022 but an improvement compared to 21.60% in 2021. The company experienced a significant growth in its return on total capital from 2019 (13.58%) to 2022 (32.05%), indicating improved efficiency in generating returns relative to the capital invested in the business.
Although there was a slight decline in 2023, the company's ability to generate returns on total capital above 20% in the last three years suggests a strong performance in utilizing both debt and equity to generate profits. Investors and stakeholders may view this as a positive sign of effective capital allocation and operational efficiency within the organization.
Peer comparison
Dec 31, 2023