Power Integrations Inc (POWI)

Fixed asset turnover

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Revenue (ttm) US$ in thousands 444,538 479,801 514,523 575,286 651,138 699,022 715,565 711,689 703,277 681,316 625,669 552,391 488,318 452,082 445,112 441,145 420,669 399,519 395,445 402,062
Property, plant and equipment US$ in thousands 164,213 166,391 168,066 173,506 176,681 181,224 184,245 180,073 179,824 168,498 167,079 168,712 166,188 147,719 138,572 123,430 116,619 114,930 112,939 113,713
Fixed asset turnover 2.71 2.88 3.06 3.32 3.69 3.86 3.88 3.95 3.91 4.04 3.74 3.27 2.94 3.06 3.21 3.57 3.61 3.48 3.50 3.54

December 31, 2023 calculation

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

The fixed asset turnover ratio for Power Integrations Inc. has been displaying a consistent declining trend over the past eight quarters, from 3.95 in Q1 2022 to 2.71 in Q4 2023. This indicates that the company's ability to generate revenue from its fixed assets has decreased over this period.

A fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate sales. A higher ratio typically indicates more efficient utilization of fixed assets in generating revenue. Conversely, a declining ratio suggests that the company may be facing challenges in optimizing the productivity of its fixed assets.

The decreasing trend in Power Integrations Inc.'s fixed asset turnover ratio may stem from various factors, such as underutilization of fixed assets, inefficient asset management, or declining sales relative to fixed asset investment. It is important for the company to closely monitor and address the reasons contributing to this trend to improve operational efficiency and enhance overall financial performance.

Management should assess the company's fixed asset utilization strategies, identify opportunities for improving asset productivity, and consider potential adjustments to optimize the utilization of fixed assets to drive revenue growth and improve profitability in the future.


Peer comparison

Dec 31, 2023