Power Integrations Inc (POWI)

Working capital 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
Total current assets	US$ in thousands	511,600	525,073	686,815	601,232	541,339
Total current liabilities	US$ in thousands	48,867	58,376	72,321	62,526	50,476
Working capital turnover		0.96	1.40	1.14	0.91	0.86

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $444,538K ÷ ($511,600K – $48,867K)
= 0.96

The working capital turnover ratio measures how efficiently Power Integrations Inc. is utilizing its working capital to generate revenue. A higher ratio indicates better efficiency in utilizing working capital.

Over the past five years, Power Integrations Inc.'s working capital turnover ratio has fluctuated. In 2023, the ratio decreased to 0.96 from 1.40 in 2022, indicating a decrease in the company's efficiency in utilizing its working capital to generate revenue. However, it is worth noting that a ratio above 1 indicates that the company is generating more revenue per dollar of working capital.

Comparing the trend from 2020 to 2023, there was an improvement in the ratio in 2022, suggesting better utilization of working capital compared to the previous year. However, the ratio decreased in 2023, which could raise concerns about the company's working capital management efficiency.

Overall, a continuous monitoring of the working capital turnover ratio is essential to assess Power Integrations Inc.'s ability to efficiently manage its working capital and generate revenue. Further analysis and comparison with industry benchmarks may provide more insights into the company's financial performance.