Power Integrations Inc (POWI)

Receivables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	444,538	651,138	703,277	488,318	420,669
Receivables	US$ in thousands	14,674	20,836	41,393	35,910	24,274
Receivables turnover		30.29	31.25	16.99	13.60	17.33

December 31, 2023 calculation

Receivables turnover = Revenue ÷ Receivables
= $444,538K ÷ $14,674K
= 30.29

The receivables turnover ratio for Power Integrations Inc. has shown a fluctuating trend over the past five years. In 2023, the company's receivables turnover ratio stood at 30.29, indicating that the company collected its accounts receivable approximately 30.29 times during the year. This represents an improvement compared to the previous year, when the ratio was 31.25.

The significant increase in the receivables turnover ratio from 2021 to 2022 suggests that Power Integrations Inc. became more efficient in collecting outstanding receivables during that period. However, the ratio in 2023 has reached a relatively high level, which could imply that the company is effectively managing its credit policies and ensuring timely collections from its customers.

Overall, a higher receivables turnover ratio is generally considered favorable as it indicates that the company is able to collect outstanding receivables quickly, thereby reducing the risk of bad debts and improving cash flow. However, it is essential for the company to strike a balance in its credit policies to maintain good customer relations while also efficiently managing its receivables.