Monolithic Power Systems Inc (MPWR)

Financial leverage ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Total assets	US$ in thousands	3,617,100	2,434,350	2,058,880	1,585,820	1,208,490
Total stockholders’ equity	US$ in thousands	3,145,770	2,049,940	1,668,600	1,243,980	966,587
Financial leverage ratio		1.15	1.19	1.23	1.27	1.25

December 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,617,100K ÷ $3,145,770K
= 1.15

The financial leverage ratio for Monolithic Power Systems Inc has demonstrated a slight upward trend from 1.25 as of December 31, 2020, to 1.27 as of December 31, 2021, before declining to 1.15 by the end of December 31, 2024. This ratio compares the company's total assets to its equity, indicating the extent to which the firm relies on debt financing. The decreasing trend suggests that the company may be reducing its reliance on debt to finance its operations, which could be a positive sign for its financial stability and risk management. However, it is essential to consider other financial metrics and market conditions to gain a comprehensive understanding of Monolithic Power Systems Inc's overall financial health.