Power Integrations Inc (POWI)

Inventory 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
Cost of revenue (ttm)	US$ in thousands	215,582	229,699	238,331	255,097	284,231	306,293	323,132	334,786	342,638	339,848	316,371	280,870	244,728	224,272	218,740	216,737	207,267	196,337	193,389	195,344
Inventory	US$ in thousands	163,164	150,246	149,741	142,444	135,420	120,092	111,258	103,115	99,266	91,814	89,643	90,509	102,878	104,805	103,963	96,633	90,380	88,710	89,197	85,080
Inventory turnover		1.32	1.53	1.59	1.79	2.10	2.55	2.90	3.25	3.45	3.70	3.53	3.10	2.38	2.14	2.10	2.24	2.29	2.21	2.17	2.30

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $215,582K ÷ $163,164K
= 1.32

The inventory turnover of Power Integrations Inc. has been showing a declining trend over the past eight quarters, with values decreasing from 3.25 in Q1 2022 to 1.32 in Q4 2023. This indicates a reduction in the efficiency of the company in managing its inventory during this period. A lower inventory turnover ratio suggests that the company is holding onto its inventory for a longer duration before selling it, which could lead to increased carrying costs and potential obsolescence risk.

The decreasing trend in inventory turnover may also signal potential issues with demand forecasting, inventory management, or production inefficiencies within the company. Investors and stakeholders may view this trend negatively as it could impact the company's profitability and cash flow generation. Management should assess the reasons behind the declining inventory turnover and take necessary actions to optimize inventory levels and improve operational efficiency in order to enhance overall financial performance.