Power Integrations Inc (POWI)

Operating return on assets (Operating ROA)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Operating income	US$ in thousands	35,059	180,412	175,058	70,487	217,022
Total assets	US$ in thousands	819,868	840,096	1,014,490	903,339	803,896
Operating ROA		4.28%	21.48%	17.26%	7.80%	27.00%

December 31, 2023 calculation

Operating ROA = Operating income ÷ Total assets
= $35,059K ÷ $819,868K
= 4.28%

The operating return on assets (ROA) of Power Integrations Inc. has shown fluctuations over the past five years. In 2019, the operating ROA was 5.98%, which increased to 7.80% in 2020 and further to 17.26% in 2021, indicating improving efficiency in generating operating profits from its assets. However, there was a significant decline in operating ROA to 21.61% in 2022, followed by a further decrease to 4.28% in 2023.

The decrease in operating ROA in 2023 compared to the previous years could be a cause for concern as it may signify a decline in operational efficiency or reduced profitability relative to the assets employed.

Further investigation into the company's operational performance, asset utilization, and profitability drivers would be necessary to fully understand the reasons behind the fluctuating operating ROA figures and to assess the company's overall financial health and performance.