Power Integrations Inc (POWI)

Activity ratios

Short-term

Turnover ratios

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
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
Receivables turnover 30.29 16.81 16.04 27.95 31.25 43.49 25.57 23.21 16.99 17.53 15.13 13.07 13.60 15.35 34.58 21.42 17.33 14.74 15.05 19.14
Payables turnover 8.17 8.04 5.88 7.35 9.45 10.38 7.80 9.25 7.84 8.41 7.55 7.36 7.05 5.14 5.10 5.83 7.56 6.43 5.37 5.84
Working capital turnover 0.96 0.95 1.06 1.21 1.40 1.54 1.74 1.36 1.14 1.07 1.04 0.95 0.91 0.86 0.87 0.87 0.86 1.23 1.30 1.39

The inventory turnover ratio for Power Integrations Inc. has been gradually decreasing over the past eight quarters, indicating that the company is managing its inventory less efficiently. A lower inventory turnover may suggest potential issues with sales forecasting, overstocking, or slow-moving inventory.

Conversely, the receivables turnover ratio has shown significant fluctuations from quarter to quarter, with no clear trend. The high variability in this ratio may indicate inconsistencies in the company's credit policies, changes in customer payment behavior, or seasonal factors affecting collections.

The payables turnover ratio has also displayed fluctuating patterns, with no consistent trend observed. This variability in payables turnover could be influenced by changes in supplier payment terms, negotiation strategies, or shifts in the company's overall purchasing patterns.

The working capital turnover ratio has generally shown a decreasing trend over the last two years, indicating a decline in the efficiency of utilizing working capital to generate sales. A lower working capital turnover may suggest that the company is not effectively managing its current assets and liabilities to support revenue generation.

Overall, Power Integrations Inc. should closely monitor and analyze these activity ratios to identify underlying operational inefficiencies and implement appropriate strategies to improve inventory management, receivables collection, payables optimization, and working capital efficiency.

Average number of days

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
Days of inventory on hand (DOH) days 276.25 238.75 229.33 203.81 173.90 143.11 125.67 112.42 105.74 98.61 103.42 117.62 153.44 170.57 173.48 162.74 159.16 164.92 168.35 158.97
Days of sales outstanding (DSO) days 12.05 21.71 22.76 13.06 11.68 8.39 14.27 15.72 21.48 20.82 24.12 27.92 26.84 23.77 10.56 17.04 21.06 24.76 24.25 19.07
Number of days of payables days 44.68 45.37 62.07 49.64 38.64 35.18 46.77 39.44 46.57 43.38 48.34 49.61 51.77 71.00 71.54 62.57 48.31 56.78 67.92 62.47

The activity ratios of Power Integrations Inc. indicate the efficiency with which the company manages its operations related to inventory, accounts receivable, and accounts payable.

1. Days of Inventory on Hand (DOH) have been increasing steadily over the past quarters, from 173.90 days in Q4 2022 to 276.25 days in Q4 2023. This suggests that the company is holding onto inventory for a longer period, potentially tying up cash and increasing the risk of obsolescence.

2. Days of Sales Outstanding (DSO) have varied throughout the quarters, with a slight increase in Q3 2023 compared to the previous quarters. However, the DSO remains relatively low, indicating a quick turnover of accounts receivable and efficient collection practices.

3. Number of Days of Payables has fluctuated over the quarters, with an increase in Q3 2023 compared to the prior quarters. A higher number of days of payables suggests that the company is taking longer to pay its suppliers, potentially benefiting from trade credit and preserving cash flow.

Overall, Power Integrations Inc. should closely monitor its inventory management practices to avoid overstocking, continue its efficient collections of accounts receivable, and assess its payment terms with suppliers to optimize cash flow and working capital efficiency.

Long-term

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
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
Total asset turnover 0.54 0.55 0.60 0.68 0.78 0.83 0.88 0.77 0.69 0.68 0.65 0.58 0.54 0.52 0.52 0.53 0.52 0.63 0.64 0.67

Power Integrations Inc.'s long-term activity ratios, specifically the fixed asset turnover and total asset turnover, provide insights into the company's efficiency in utilizing its assets to generate revenue.

The fixed asset turnover ratio has shown a consistent declining trend from 3.95 in Q1 2022 to 2.71 in Q4 2023. This indicates that the company is generating less revenue for each dollar invested in fixed assets over time. A lower fixed asset turnover ratio may suggest inefficiencies in the utilization of the company's fixed assets or potential underperformance in generating sales from these assets.

On the other hand, the total asset turnover ratio has also decreased from 0.77 in Q1 2022 to 0.54 in Q4 2023. This decline indicates that the company is generating less revenue for each dollar of total assets employed. A decreasing total asset turnover ratio may be reflective of inefficiencies in asset utilization or declining sales relative to the total assets of the company.

Overall, the declining trend in both fixed asset turnover and total asset turnover ratios for Power Integrations Inc. suggests potential inefficiencies in asset utilization and revenue generation, which should be further investigated to enhance operational performance and profitability.