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