Power Integrations Inc (POWI)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	194,222	215,582	284,231	342,638	244,728
Inventory	US$ in thousands	165,612	163,164	135,420	99,266	102,878
Inventory turnover		1.17	1.32	2.10	3.45	2.38

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $194,222K ÷ $165,612K
= 1.17

Power Integrations Inc's inventory turnover has fluctuated over the past five years, starting at 2.38 in December 31, 2020, increasing to 3.45 in December 31, 2021, but then declining to 2.10 in December 31, 2022. Subsequently, there was a significant drop to 1.32 in December 31, 2023, followed by a further decrease to 1.17 in December 31, 2024.

A higher inventory turnover ratio indicates that the company is selling its inventory more efficiently. Conversely, a decreasing turnover ratio suggests that the company may be facing challenges in managing or selling its inventory effectively.

The decreasing trend in inventory turnover may indicate issues such as overstocking, declining demand for the company's products, or inefficiencies in inventory management. Power Integrations Inc should monitor its inventory turnover closely and take appropriate actions to improve inventory management efficiency in order to optimize its working capital and overall profitability.