Power Integrations Inc (POWI)

Fixed asset turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	444,538	651,138	703,277	488,318	420,669
Property, plant and equipment	US$ in thousands	164,213	176,681	179,824	166,188	116,619
Fixed asset turnover		2.71	3.69	3.91	2.94	3.61

December 31, 2023 calculation

Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $444,538K ÷ $164,213K
= 2.71

Fixed asset turnover is a financial ratio that indicates how efficiently a company is utilizing its fixed assets to generate revenue. A higher fixed asset turnover ratio suggests that the company is effectively using its fixed assets to generate sales.

Looking at the trend of Power Integrations Inc.'s fixed asset turnover ratio over the past five years, we can observe fluctuations in the efficiency of the company's fixed asset utilization. The ratio decreased from 3.61 in 2019 to 2.94 in 2020, indicating a temporary decline in the company's ability to generate revenue from its fixed assets. However, this was followed by an improvement in 2021, with the ratio increasing to 3.91, demonstrating a more efficient use of fixed assets.

In 2022, the fixed asset turnover ratio further improved to 3.69 before experiencing a decrease to 2.71 in 2023. This decrease may indicate that the company faced challenges in effectively utilizing its fixed assets to drive sales during that period.

Overall, Power Integrations Inc. has shown varying levels of efficiency in utilizing its fixed assets to generate revenue over the past five years. It is important for the company to continue monitoring and managing its fixed asset turnover to ensure optimal efficiency and profitability in the future.