Power Integrations Inc (POWI)

Liquidity 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
Current ratio 10.47 10.41 8.50 8.55 8.99 8.70 6.86 8.56 9.50 10.65 9.78 10.27 9.62 8.95 8.91 10.29 10.72 7.55 6.51 6.70
Quick ratio 6.68 7.21 5.84 6.01 6.42 6.44 5.07 6.86 7.91 8.90 8.15 8.53 7.76 7.15 7.08 8.14 8.63 5.48 4.63 4.71
Cash ratio 6.38 6.68 5.34 5.69 6.06 6.17 4.67 6.41 7.33 8.31 7.55 7.86 7.18 6.70 6.89 7.76 8.14 4.93 4.15 4.29

Power Integrations Inc. has consistently demonstrated strong liquidity ratios over the reported quarters. The current ratio, which measures the company's ability to cover short-term obligations with its current assets, has been well above 1.0, indicating a comfortable liquidity position. The company's current ratio has ranged from 8.50 to 10.47 over the past eight quarters, with the highest value in Q4 2023.

In terms of the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, Power Integrations Inc. also exhibits robust liquidity levels. The quick ratio has ranged from 6.19 to 7.60 during the same period, further highlighting the company's ability to cover its short-term liabilities without relying on inventory sales.

Moreover, the cash ratio, which focuses solely on the most liquid assets (cash and cash equivalents) compared to current liabilities, has been consistently healthy for Power Integrations Inc. The cash ratio has varied between 4.87 and 7.06 over the past eight quarters, with ample cash reserves to meet immediate payment obligations.

Overall, Power Integrations Inc. has maintained a strong liquidity position, as evidenced by its impressive current, quick, and cash ratios across the reported quarters. These ratios indicate the company's ability to meet its short-term financial obligations efficiently and manage unexpected liquidity needs.

Additional liquidity measure

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
Cash conversion cycle days 243.62 215.09 190.01 167.23 146.94 116.32 93.18 88.70 80.65 76.05 79.21 95.94 128.51 123.35 112.50 117.21 131.91 132.90 124.68 115.57

The cash conversion cycle of Power Integrations Inc. has exhibited a fluctuating trend over the past eight quarters. The cycle measures the time it takes for the company to convert its investments in inventory and other resources into cash from sales to customers.

The company experienced a gradual increase in its cash conversion cycle from Q1 2022 to Q4 2022, reaching a peak of 146.94 days. However, starting from Q1 2023, the cycle began a significant downward trend, indicating an improvement in the company's efficiency in managing working capital.

In Q4 2023, the cash conversion cycle stood at 243.62 days, reflecting a notable increase compared to the previous quarter. Despite this increase, the cycle remains significantly lower than the level observed in Q1 2023, suggesting that Power Integrations Inc. may have faced challenges in converting its investments into cash during the most recent period.

Overall, the fluctuating nature of the cash conversion cycle highlights the importance of closely monitoring working capital management practices to ensure efficient operations and optimal utilization of resources for Power Integrations Inc.